Yuan Renminbi. Picture: EPA/WOO HE
Yuan Renminbi. Picture: EPA/WOO HE

Beijing — China’s central bank sold a net $30.42bn worth of foreign exchange in January, the least in five months, amid signs capital flows have lessened as the yuan steadies against the dollar.

Net foreign exchange sales by the People’s Bank of China (PBoC) amounted to 208.8-billion yuan ($30.42bn), according to Reuters calculations based on central bank data released on Friday. That compared with net sales of 317.8-billion yuan in December and 644.54-billion yuan in January 2016.

The yuan gained nearly 1% in January as the PBoC is widely believed to have sold US dollars to support the yuan in recent months, while authorities have also tightened measures to prevent capital outflows.

Efforts to prop up the yuan led China’s foreign exchange reserves to fall below the $3-trillion level in January for the first time in nearly six years. But the drop moderated from recent months, suggesting tighter controls are slowing capital flight. Data on Thursday seemed to confirm that closer scrutiny of outflows are working, as outbound direct investment from China fell 35.7% in January compared with a year earlier.

Reuters

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