In the first three quarters, the trading volume of my country’s domestic RMB foreign exchange market increased by 10.1% year-on-year.
On October 22, the State Council Information Office held a press conference to discuss the foreign exchange revenue and expenditure data for the first three quarters of 2024. Li Hongyan, Deputy Director of the State Administration of Foreign Exchange, reported that the total trading volume in the domestic Renminbi foreign exchange market reached $30.27 trillion, an increase of 10.1% year-on-year.
Li noted that since the beginning of 2024, the global economic and financial landscape has been complex and constantly changing, with rising geopolitical risks. Despite these challenges, China has maintained a steady progress approach to governance, strengthening macro policy adjustments. The national economy has remained generally stable and has seen steady improvement, with cross-border capital flows becoming more balanced. The foreign exchange market has demonstrated significant resilience, with overall market expectations and trading activity being rational and orderly. The Renminbi exchange rate has remained stable at a reasonable and balanced level.
Looking at data on foreign payments and receipts handled by banks, for the first three quarters of 2024, banks recorded $525.94 billion in foreign income and $525.66 billion in outward payments, resulting in a surplus of $2.8 billion. In Renminbi terms, foreign income reached 37.39 trillion yuan, with outward payments at 37.37 trillion yuan, leading to a surplus of 18.7 billion yuan. Additionally, when examining foreign exchange settlement and sales, the data showed that for the first three quarters, $167.62 billion was settled while $179.75 billion was sold, resulting in a deficit of $12.13 billion. In terms of Renminbi, the figures were 11.91 trillion yuan settled and 12.78 trillion yuan sold, resulting in a deficit of 864.6 billion yuan.
Li highlighted several key features of China’s foreign exchange revenue and expenditure situation for the first three quarters of 2024:
1. Cross-border capital flows have shown a return to net inflows. Overall, banks experienced a slight surplus in foreign payments and receipts during the first three quarters, with the first quarter showing a small surplus, the second quarter shifting to a deficit, and the third quarter returning to surplus. This was primarily driven by continued net inflows from goods trade and improving foreign investment in China, while domestic entities maintained orderly outward investments.
2. Settlement and sales of foreign exchange moved towards a basic balance. Though deficits were present overall, particularly widening in the second quarter, a balanced state was re-established in the third quarter, with September seeing a return to surplus as settlement increased and sales stabilized.
3. Recently, the settlement rate has risen in an orderly manner while the sales rate has slightly declined, with businesses maintaining rational foreign currency exchange intentions. The settlement rate for foreign exchange income stood at 62.1%, while the purchase rate was 68.9%. The rates from August to September indicated a settlement rate of 66.4%, up 5.7 percentage points from the earlier months, while the sales rate was 66.7%, down 2.8 percentage points.
4. The foreign exchange market has remained active. The total trading volume in the domestic Renminbi foreign exchange market for the first three quarters was $30.27 trillion, marking a 10.1% increase. Spot and derivatives trading volumes were $10.18 trillion and $20.09 trillion, respectively, with the derivatives market accounting for 66.4% of the total, an increase of 3.7 percentage points compared to the same period in 2023.
5. The scale of foreign exchange reserves has remained broadly stable. This year, non-U.S. dollar currencies have experienced fluctuations against the dollar, with global asset prices generally on the rise. Consequently, influences from exchange rate conversions and asset valuation changes have led to stable growth in China’s foreign exchange reserves, which totaled $33,164 billion by the end of September, an increase of $78.4 billion since the end of 2023.
Li emphasized that moving forward, the State Administration of Foreign Exchange will thoroughly implement the spirit of the Third Plenary Session of the 20th Central Committee of the Communist Party and the directives from the Politburo meeting on September 26. This will involve greater focus on systematic integration, prioritizing key areas, and enhancing the effectiveness of reforms. The agency is committed to following the path of financial development with Chinese characteristics, efficiently advancing reforms, managing risks within the foreign exchange sector, and increasing support for the real economy to promote sustained and positive economic growth.
