Core Viewpoint - The foreign exchange market in China showed overall balance in supply and demand in August 2025, with a net inflow of $3.2 billion and a surplus of $14.6 billion in bank settlement and sales of foreign exchange, indicating stable market expectations [1] Summary by Relevant Sections Foreign Exchange Market Performance - In August, the bank's foreign exchange settlement amounted to $211.8 billion, while foreign exchange sales reached $197.1 billion, continuing the surplus trend [1] - The total scale of bank customer foreign exchange receipts and payments reached $1.3 trillion, a year-on-year increase of 8%, maintaining a high level [1] Cross-Border Capital Flow - The net inflow from goods trade remained stable, with foreign capital net purchases of domestic stocks and bonds [1] - The service trade and investment income saw a seasonal decline in net outflows [1] Overall Market Sentiment - The foreign exchange market transactions remained active, reflecting rational and orderly behavior from enterprises and individuals [1] - The balance of payments for bank customer foreign exchange income was slightly in surplus, with receipts of $638.3 billion and payments of $635 billion, indicating basic balance [1]

Core Insights - The State Administration of Foreign Exchange (SAFE) reported that in June 2025, banks settled foreign exchange transactions amounting to $207.7 billion and sold $182.3 billion, indicating a stable foreign exchange market performance [1] - For the first half of 2025, cumulative bank settlements reached $1,143.2 billion, while cumulative sales were $1,168.5 billion, reflecting ongoing active cross-border trade and investment activities [1] Group 1: Foreign Exchange Reserves and Market Dynamics - In the first half of 2025, the total cross-border income and expenditure of non-bank sectors reached $7.6 trillion, a year-on-year increase of 10.4%, marking a historical high for the same period [2] - The net inflow of cross-border funds for non-bank sectors was $127.3 billion, continuing the trend from the second half of last year, with a 46% quarter-on-quarter increase in Q2 [2] - The foreign exchange market showed basic balance, with a deficit of $25.3 billion in bank settlements, but a shift to surplus in May and June, indicating rational trading behavior among enterprises and individuals [2][3] Group 2: Market Activity and Future Outlook - The total trading volume in the domestic RMB foreign exchange market reached $21 trillion, a 10.2% increase year-on-year, with spot and derivative transactions accounting for 35% and 65% respectively [3] - As of the end of June, China's foreign exchange reserves stood at $3,317.4 billion, an increase of $115.1 billion from the end of 2024, supported by the appreciation of non-USD currencies and rising global financial asset prices [3] - SAFE plans to continue implementing policies that promote a more convenient, open, secure, and intelligent foreign exchange management system to support high-quality economic development and openness [3]

Core Insights - The State Administration of Foreign Exchange reported that in the first half of 2025, the total cross-border income and expenditure of non-bank sectors reached $7.6 trillion, marking a year-on-year increase of 10.4%, the highest for the same period in history [1][3] Group 1: Cross-Border Transactions - The cross-border income and expenditure of enterprises and individuals amounted to $7.6 trillion, with a 10.4% year-on-year growth, and the proportion of RMB in cross-border transactions reached 53% [3] - The total settlement and sale of foreign exchange by banks was $2.3 trillion, reflecting a 3% year-on-year increase, the second highest for the same period historically [3] - There was a net inflow of cross-border funds amounting to $127.3 billion, continuing the net inflow trend since the second half of last year, with a 46% quarter-on-quarter growth in Q2 [3] Group 2: Foreign Exchange Market Dynamics - The foreign exchange market showed basic balance, with a settlement deficit of $25.3 billion in the first half, but monthly trends indicated fluctuations from deficit to surplus [3] - The foreign exchange income settlement rate was stable at 60%, while the foreign exchange expenditure settlement rate decreased by 3 percentage points to 65% [3] - The total trading volume in the domestic RMB foreign exchange market reached $21 trillion, a 10.2% year-on-year increase, with spot and derivative transactions accounting for 35% and 65% respectively [4] Group 3: Foreign Exchange Reserves and Currency Stability - As of the end of June, China's foreign exchange reserves stood at $3.3174 trillion, an increase of $115.1 billion from the end of 2024 [4] - The RMB exchange rate remained stable, appreciating by 1.9% against the USD, fluctuating between 7.15 and 7.35 [5] - The current account surplus has been steadily increasing, with direct investment inflows into China reaching $31.1 billion, a 16% year-on-year increase [5]