Safe: the fluctuation of cross-border funds under securities investment is within the normal and controllable range

2022-06-01 0 By

Recently, affected by the russia-Ukraine conflict and the US Federal Reserve’s interest rate hike, the global financial market has been in turmoil and global cross-border capital flows have seen great fluctuations.An official with the State Administration of Foreign Exchange (SAFE) said Monday that China’s cross-border capital flows are generally stable.Short-term volatility in cross-border portfolio investment does not represent a reversal of the long-term trend of foreign investment in China’s capital markets.”The fluctuation of cross-border funds under securities investment is within normal and controllable scope.”The official said that due to changes in the external environment, foreign investment in domestic stocks and bonds has increased volatility, which is normal under the complex international economic and financial situation, and the impact on the RMB exchange rate and cross-border capital flows is generally controllable.Bridge cranes work in Meishan Port area of Zhoushan Port in Ningbo, East China’s Zhejiang Province, Dec. 16, 2021.As of the end of February 2022, the total market value of China’s bonds and stocks held by foreign investors was 1.25 trillion US dollars.On the whole, China’s cross-border capital flows remain reasonable and balanced, the foreign exchange market is generally stable, and domestic foreign exchange supply and demand are basically balanced.On the one hand, the RMB exchange rate is relatively stable in the world.By the end of March, the RMB was trading at 6.3433 against the US dollar, up 0.5% from the end of 2021, while the US dollar rose 2.4% during the same period.On the other hand, supported by the steady recovery of the domestic economy, China saw a net inflow of us $25.6 billion and US $8.8 billion of cross-border funds related to the real economy, including trade and direct investment, in February, which basically balanced the supply and demand of the domestic foreign exchange market.Cross-border capital inflows generally picked up in March.”From the future trend, foreign investment in RMB assets will continue to be dominated by additional allocation.”China’s national economy is resilient and will operate within a reasonable range, the opening of the financial market is progressing steadily, and the value of the RMB is basically stable and has good allocation value, the official said.At the same time, RMB assets have relatively independent asset return performance globally, which helps foreign investors to diversify risks.”At present, foreign investment accounts for only about 3 to 5 per cent of China’s bond and stock markets, so there is still great potential for more foreign investment.”(Reporter Liu Kaixiong)