China sees lower forex deficit in first quarter

Chinese commercial banks reported a significant drop in net foreign exchange sales in the first quarter as cross-border capital flows stayed balanced and stable, the country's forex regulator said.

Forex purchases by banks stood at $154.4 billion and sales stood at $163.6 billion in March - a transaction deficit of $9.2 billion, up from $8.2 billion in February according to the State Administration of Foreign Exchange.

The total transaction deficit between banks' forex purchases and sales in the first quarter decreased to $18.3 billion, down 55 percent year-on-year, the administration reported.

Chinese lenders bought $434.2 billion worth of foreign currencies and sold $452.5 billion from January to March, according to Wang Chunying, spokesperson for the State Administration of Foreign Exchange.

Forex supply and demand has been basically balanced so far this year, Wang said, noting that the market entities were more willing to borrow forex loans instead of buying foreign currencies from banks.

In line with the forex sales data, China's forex reserves rose to $3.14 trillion at the end of March, $2.9 billion higher than three months ago.