China’s foreign exchange deposits rose for the 10th straight month in May to an historic high, official central bank data showed, even as the yuan extended gains against the dollar.
HERE ARE SOME DETAILS:
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Balance of China’s foreign exchange deposits rose to $1.16 trillion at the end of May, up 17.5% from a year earlier. Such deposits grew $103.2 billion in the first five months of this year, the People’s Bank of China (PBOC) data showed.
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FX demand deposits held by non-financial enterprises rose $17.1 billion, serving as the primary source of growth in FX deposits last month, according to detailed data from the central bank’s balance sheet released late on Tuesday.
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FX deposits held by households also expanded for four consecutive months to $166.2 billion, PBOC data showed.
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China’s commercial banks purchased a net $35.8 billion of foreign exchange in May, the FX regulator said on Monday.
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Several Chinese banks have raised dollar deposit rates in recent weeks, sources told Reuters earlier this month, in a move some traders say is likely aimed at slowing the pace of yuan appreciation.
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China’s yuan USDCNY has strengthened about 3.5% against the dollar so far this year to become one of the best performing emerging market currencies.
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China’s strong exports and expanding trade surplus continue to inject high volumes of foreign currency, mostly U.S. dollars, into the domestic financial system. China recorded $105.43 billion of trade surplus in May, customs data showed.