China's June forex purchase likely to rebound

Photo taken on March 16, 2014, shows yuan (central) and other currencies in the picture. [Photo/IC]

BEIJING - Foreign exchange purchases in June will rise significantly from May, Lian Ping, chief economist at Bank of Communications, was quoted by Saturday's China Securities Journal as saying.

Lian noted that June's exports are very likely to move up following improvements from March to May, probably resulting in a bigger trade surplus and more funds available for foreign exchange.

In previous months, bowing to downward pressure, individuals and banks preferred to hold forex and cross-border direct investment has slowed.

As the Chinese economy is showing more signs of stabilizing and targeted measures take effect, there will likely be more capital inflows and more forex settlements in June, factors pointing to increasing funds available for foreign exchange, according to Lian.

Lian forecast yuan funds available for foreign exchange will see continuous month-on-month increases in the second half of 2014, but the increases will be smaller from the same period last year.

The central bank is expected to release June's forex purchase data next week.

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