Forex regulator dismisses hot money inflow concerns (2)

Chinese clients exchanged 125 billion U.S. dollars in foreign currency for yuan through the country's banks in October. They bought 117.2 billion U.S. dollars in foreign currency from financial institutions last month, according to the SAFE data.

This resulted in a foreign exchange surplus of 7.8 billion U.S. dollars in October. This follows a surplus of 6.5 billion U.S. dollars in September, indicating that Chinese business and individuals are becoming more willing to hold onto the yuan, with expectations for a stronger currency.

The third round of quantitative easing by the United States has not yet caused obvious hot money inflows into China because of a series of factors. These include continuous declines of the yuan's forward exchange rates, the narrowing interest rate gap between China and other countries as well as the fragile economic recovery in the country, according to the statement.

The SAFE pledged to strengthen the monitoring and management of abnormal cross-border capital inflows and outflows and accelerate the development of the country's foreign exchange market, the statement added.

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