PRESSURE on China’s cross-border capital outflows has gradually eased, China’s foreign exchanged regulator said yesterday, after data showed commercial banks’ foreign exchange sales dropped in May.

    China’s commercial banks sold a net US$12.5 billion worth of foreign exchange in May, versus net sales of US$23.7 billion in April, data from the State Administration of Foreign Exchange (SAFE) showed.

    “This year, China’s cross-border capital outflow pressure has eased, better reflecting the economy’s fundamentals,” the SAFE said in a statement on its website.

    Both Chinese companies and individuals are less willing to keep foreign exchange, the regulator added, citing data that outstanding foreign currency deposits in China declined by US$8.8 billion in May compared with an increase of US$900 million in April.

    Companies’ efforts to deleverage their foreign debt also slowed, the SAFE said.

    Net forex sales totaled US$161.0 billion in the first five months, the regulator said on its website.

    China’s central bank sold a net 53.7 billion yuan (US$8.16 billion) worth of foreign exchange in May, earlier data showed, easing from net sales of 54.4 billion yuan in April.

    China’s foreign exchange reserves fell by US$27.9 billion in May to US$3.19 trillion, their lowest since December 2011, likely due to the effects of a stronger dollar and sporadic official intervention.

    (SD-Agencies)