China says outflows of money normal and not a sign of panic capital flight
Foreign exchange reserves in biggest quarterly fall from July to September as central bank stepped up intervention to calm fears after its August currency devaluation
Recent outflows of money from China are “normal” and not a sign of panic capital flight, a senior official at the foreign exchange regulator said on Thursday, downplaying fears over growing outflows as the economy slows.
China was confident about keeping international payments and receipts balanced in the future thanks to a positive economic outlook, Wang Xiaoyi, deputy head of the State Administration of Foreign Exchange (Safe) told a news conference.
“Current changes [in capital flows] are normal, which should not be regarded as capital flight,” Wang said.
The main reasons for recent outflows were a greater willingness by companies and individuals to hold foreign exchange, and moves by firms that were adjusting their foreign debt structures and increasing investment abroad, Wang said.
China’s foreign exchange reserves posted their biggest quarterly decline on record from July to September, as the central bank stepped up its intervention to stabilise the yuan and calm sentiment after it unexpectedly devalued the currency on August 11, shocking global markets.