China records smaller inflow and FX reserve dropped in March 201225 April, 2012, 14:58. Posted by Zarathustra
Tags: Capital flow, Foreign Reserve, Monetary Statistics, PBOC
The People’s Bank of China published the detailed tables for their latest monetary statistics for March 2012.
Again, we look at the change in position for forex purchase as an indication of money flow into and out of China, which is particularly interesting after we saw very sizeable outflow in the end of last year. For March, the overall position for FX purchase increased by RMB125 billion. If we take the trade surplus of US$5.35 billion, or roughly RMB33.8 billion, into account, that would indicate a capital inflow of RMB91 billion, down from RMB223 billion in February, a decrease of 59%.
Also of particular interest is that when the PBOC published the monetary statistics earlier, we only knew the size of foreign reserve at the end of March, while we did not have any idea about the figures for January and February. Now the PBOC published the figures, which show that foreign reserve increased in January and February by US$72.5 billion and US$56.0 billion respectively, but dropped very slightly by US$4.7 billion. In other words, although foreign reserve was up on the quarter, it was down for March alone. The previous instances of month-on-month drop in foreign reserve occurred late 2011 (September, November and December), May 2010, and late 2008/early 2009.
Source: People’s Bank of China