China Financial Daily:SAFE,Better Supply-Demand in Forex;Stabilized Overseas Investment

State Administration of Foreign Exchange officials indicated cross-border flowhas stabilized in 1H17, and overall expectation of RMB depreciation isweakening. The aggregate foreign exchange supply-demand is currentlypositioned in a better level compared to past three years, and overseas directinvestment remains stable and consistent. According to data released by StateCouncil, both current and capital account saw surplus in 1Q17; capital outflowfrom non-banking sector gradually stabilized and foreign exchange reservesaw consecutive five-month rebound. As of end-June, net RMB exchanged toforeign currency came at US$92.8bn, down 46% yoy; banks’ paymentdenominated by non-RMB currencies on behalf of clients reached US$84.2bn,down 50% yoy. The accumulated new increase of overseas foreign currencyloan in 1H17was at US$7.1n, compared to a decline of US$58.3bn in 1H16.Individual overseas foreign currency deposit dropped by US$1.7bn in 1H17versus an increase of US$12.9bn in 1H16. They also highlighted the FXforward settlement saw US$9.5bn surplus in first half, compared to deficit ofUS$37bn in the same period of 2016, implying weakening expectation on Rmbdepreciation. Based on Ministry of Commerce data, domestic investors’ totalnon-financial direct investment to overseas market reached US$48.2bn, down45.8% yoy.