Chinese banks' net forex sales drop in January

BEIJING - Net foreign exchange sales in Chinese banks dropped last month, indicating eased capital outflows, new data showed Friday.

Banks bought $121.6 billion worth of foreign currency and sold $140.8 billion, resulting in a net sale of $19.2 billion in January, according to an online State Administration of Foreign Exchange (SAFE) statement.

The deficit was down from December's $46.3 billion and November's $33.4 billion.

The pressure on capital outflows has been alleviated since the start of the year, SAFE said, citing month-on-month declines in foreign currency buying by businesses and individuals for overseas investment, study and trips.

There had been rising concerns about capital flowing out of the Chinese market in the second half of 2016, when the economy was facing looming downward pressures and the Chinese yuan was in the middle of a losing streak against the US dollar.

But the yuan gradually recovered from its weakness in recent months. Its central parity rate strengthened for the fourth consecutive day to 6.8456 against the US dollar Friday, marking a more than three-week high.

The Chinese economy also started 2017 on a firmer footing, supported by robust factory activities and better-than expected foreign trade.

Despite external uncertainties, China's sound economic fundamentals will determine stable cross-border capital flows in the medium and long run, according to SAFE.