Core Viewpoint - The article discusses the fluctuations in the Chinese yuan (RMB) exchange rate amid uncertainties in U.S. trade policy and Federal Reserve interest rate expectations, highlighting the impact on cross-border capital flows and the overall economic environment [1][2][3]. Exchange Rate Trends - In July, the RMB exchange rate continued to show narrow fluctuations, with the CFETS RMB index and BIS currency basket index rising by 1.5% and 1.8% respectively, ending a six-month decline [1] - The SDR currency basket index also reversed a previous decline of 0.9% to increase by 1.5% [1] - Despite these increases, the three major exchange rate indices fell by 4.6%, 4.3%, and 3.2% respectively in the first seven months of the year, indicating that the RMB's passive appreciation has not adversely affected export competitiveness [1] Currency Market Dynamics - The RMB central parity rate strengthened for the third consecutive month in July, while the onshore spot exchange rate fell by 0.4% to around 7.19 [2] - The average deviation between the central parity and onshore spot rates increased from 0.1% to 0.3%, the highest in three months [2] - The average onshore exchange rate rose by 0.1% to 7.1727, marking the third consecutive month of appreciation [2] Cross-Border Capital Flows - In July, banks recorded a foreign exchange payment deficit of $7.7 billion, with the RMB payment deficit increasing to $43.3 billion, the third highest on record [3] - The foreign currency payment surplus decreased to $35.6 billion, but remained historically high [3] - The main contributor to the deficit was securities investment, which accounted for 160% of the shift from surplus to deficit [3] Foreign Investment Trends - Foreign investment in Chinese stocks has increased, while there has been a significant reduction in holdings of RMB-denominated bonds, leading to record high outflows [2][3] - The reduction in bond holdings is attributed to a narrowing of forward dollar discounts, which decreased the attractiveness of RMB bond investments [3] Forward Exchange Transactions - In July, banks recorded a surplus in forward foreign exchange transactions for the fifth consecutive month, with a surplus of $45.6 billion, the highest in five months [4] - The increase in surplus was primarily driven by foreign exchange derivatives transactions, which rose by $16 billion [4] Overall Market Sentiment - The article indicates that the market does not exhibit strong expectations for RMB appreciation despite previous trends, suggesting a potential for slight depreciation pressure on the currency [2][5] - The overall supply of foreign exchange in the domestic market is believed to be greater than the reported surplus, indicating a more complex market dynamic [5]

Core Viewpoint - In July, the uncertainty of U.S. tariff policies continued to increase global trade uncertainty, but market reactions weakened, leading to a rebound in the U.S. dollar index and a slight depreciation of the onshore RMB exchange rate, while the average exchange rate continued to strengthen. However, market participants did not accumulate expectations for a rebound [1][2]. Exchange Rate and Currency Trends - The U.S. dollar index rose by 3.4% in July, ending a five-month decline, reaching a high of 100.0, the highest since late May [2]. - The onshore RMB exchange rate fell by 0.4% to around 7.19, while the average exchange rate increased by 0.1% to 7.1727, marking the third consecutive month of appreciation [3]. - The CFETS RMB exchange rate index and the BIS currency basket reference index both ended a six-month decline, rising by 1.5% and 1.8% respectively [3]. Cross-Border Capital Flows - In July, there was a small net outflow of cross-border funds, with foreign investment in stock assets increasing, while foreign investors significantly reduced their holdings of RMB-denominated bonds, leading to a historical high in the scale of cross-border RMB and securities investment expenditures [7][8]. - The foreign investment in domestic stock markets increased from a net inflow of $1.2 billion in June to $2.7 billion in July [8]. Foreign Investment Behavior - Foreign investors reduced their holdings of RMB-denominated bonds for the third consecutive month, with the reduction scale reaching a historical high of 303.9 billion yuan [9]. - The average one-year USD/RMB forward discount narrowed significantly, leading to a decrease in the attractiveness of RMB bonds for foreign investors [9]. Banking and Forex Market Dynamics - In July, the banking sector recorded a surplus in foreign exchange settlement and sales for the fifth consecutive month, with a surplus of $45.6 billion, the highest in five months [13]. - The willingness of market participants to accumulate foreign exchange decreased, as indicated by a decline in the balance of foreign currency deposits in financial institutions [15]. Trade and Payment Trends - The surplus in goods trade increased by $22.6 billion to $89.4 billion, the second highest on record, due to a significant increase in foreign income [10]. - The service trade recorded a deficit increase of $2.8 billion, reflecting increased outbound demand during the summer [11].

Core Insights - The State Administration of Foreign Exchange reported that in July 2025, banks settled 16,700 billion RMB and sold 15,070 billion RMB [1] - From January to July 2025, banks cumulatively settled 98,835 billion RMB and sold 99,020 billion RMB [1] Currency Settlement - In July 2025, banks settled 2,336 billion USD and sold 2,108 billion USD [1] - Cumulatively from January to July 2025, banks settled 13,768 billion USD and sold 13,793 billion USD [1] Foreign Exchange Income and Payments - In July 2025, banks recorded foreign income of 49,357 billion RMB and foreign payments of 49,909 billion RMB [1] - From January to July 2025, cumulative foreign income was 326,705 billion RMB and cumulative foreign payments were 318,116 billion RMB [1] Foreign Exchange Income and Payments in USD - In July 2025, banks recorded foreign income of 6,904 billion USD and foreign payments of 6,981 billion USD [1] - Cumulatively from January to July 2025, foreign income was 45,510 billion USD and foreign payments were 44,315 billion USD [1]

Core Insights - In July, banks in China reported a settlement of 16,700 billion yuan and a sale of 15,070 billion yuan, indicating a continued surplus in foreign exchange transactions [1] - The foreign exchange market in China has remained stable, with a month-on-month increase of 12% in settlement and 16% in sales, resulting in a surplus of 22.8 billion USD [1] - Cross-border capital flows have been generally stable, with non-bank sectors maintaining high levels of income and expenditure, leading to a balanced flow [1] Group 1 - In July, the net inflow of funds from goods trade increased by 33%, maintaining a high operational level [1] - The net outflow of funds from service trade and investment income rose by 34% and 7% respectively, attributed to seasonal factors such as summer travel and corporate dividend payouts [1] - The overall foreign exchange market is characterized by stable expectations and active trading, with a slight increase in the settlement rate and a stable sale rate among enterprises and individuals [1]

Core Insights - The foreign exchange market in China showed stable expectations and orderly transactions in July 2025, with non-bank sector cross-border receipts at historical highs [1][2] - The net inflow of funds from goods trade increased by 33% month-on-month, maintaining a high operational level [1][2] Group 1: Bank Settlement and Foreign Exchange - In July, banks settled foreign exchange with a total of 233.6 billion USD and sold 210.8 billion USD, representing month-on-month increases of 12% and 16% respectively [1] - The exchange settlement rate for enterprises and individuals slightly increased, while the selling rate remained stable, indicating stable market expectations and active trading [1] Group 2: Cross-Border Fund Flows - In July, the scale of bank customer foreign-related receipts reached 690.4 billion USD, with payments of 698.1 billion USD, resulting in a slight deficit of 7.7 billion USD, reflecting a balanced cross-border fund flow [2] - Cumulative surplus for the first seven months was 119.5 billion USD, indicating a continued net inflow of cross-border funds [2] Group 3: Market Resilience and Economic Development - Despite increased volatility in the international foreign exchange market, the steady progress of high-quality economic development in China and the enhanced resilience of the foreign exchange market are expected to support stable market operations [2]

Core Insights - The overall cross-border capital flow in China remained stable in July, with non-bank sectors such as enterprises and individuals experiencing high levels of cross-border income and expenditure, resulting in a basic balance [1] - Net inflow of funds from goods trade increased by 33% month-on-month, maintaining a high operational level [1] - Net outflows from service trade and investment income rose by 34% and 7% respectively, attributed to seasonal factors such as summer travel and corporate dividend distributions [1] Financial Market Performance - The foreign exchange market in China operated smoothly in July, with bank settlement and sale volumes increasing by 12% and 16% month-on-month, respectively [1] - The settlement and sale of foreign exchange continued to show a surplus, amounting to 22.8 billion USD [1] - The settlement rate for enterprises and individuals slightly increased, while the sale rate remained stable, indicating orderly market expectations and transactions [1]

Core Insights - The State Administration of Foreign Exchange reported that in July 2025, banks settled 16,700 billion RMB and sold 15,070 billion RMB [1] - For the first seven months of 2025, banks cumulatively settled 98,835 billion RMB and sold 99,020 billion RMB [1] Currency Exchange Data - In July 2025, banks settled 2,336 million USD and sold 2,108 million USD [1] - From January to July 2025, banks cumulatively settled 13,768 million USD and sold 13,793 million USD [1] Foreign Exchange Income and Payments - In July 2025, banks recorded foreign income of 49,357 billion RMB and foreign payments of 49,909 billion RMB [1] - For the first seven months of 2025, banks cumulatively recorded foreign income of 326,705 billion RMB and foreign payments of 318,116 billion RMB [1] Foreign Exchange Income and Payments in USD - In July 2025, banks recorded foreign income of 6,904 million USD and foreign payments of 6,981 million USD [1] - From January to July 2025, banks cumulatively recorded foreign income of 45,510 million USD and foreign payments of 44,315 million USD [1]

Core Insights - The foreign exchange market in China has maintained stable operations despite increased volatility in the international currency market since July 2023 [1] Market Performance - In July, the scale of bank foreign exchange settlement and sales increased by 12% and 16% respectively, continuing a surplus trend with a total of 22.8 billion USD [1] - The exchange rate for enterprises and individuals showed a slight increase in settlement rates while sales rates remained stable, indicating stable market expectations and active trading [1] Cross-Border Capital Flows - Overall, cross-border capital flows remained stable, with non-bank sectors' cross-border income and expenditure at historical highs, achieving a near balance [1] - Net inflow from goods trade increased by 33% month-on-month, maintaining a high level, while net outflows from service trade and investment income rose by 34% and 7% respectively, attributed to seasonal factors such as summer travel and corporate dividend payouts [1] Economic Context - The steady progress of high-quality economic development in China, along with the increasing resilience of the foreign exchange market, is expected to provide strong support for the stable operation of the foreign exchange market [1]

Core Insights - The State Administration of Foreign Exchange (SAFE) released data on bank foreign exchange settlement and sales for July 2025, indicating significant foreign exchange activity in the banking sector [1] Group 1: Bank Foreign Exchange Settlement and Sales - In July 2025, banks settled foreign exchange amounting to 16,700 billion RMB and sold 15,070 billion RMB [1] - From January to July 2025, cumulative bank foreign exchange settlement reached 98,835 billion RMB, while sales totaled 99,020 billion RMB [1] - In USD terms, banks settled 2,336 million USD and sold 2,108 million USD in July 2025 [1] - Cumulatively, from January to July 2025, banks settled 13,768 million USD and sold 13,793 million USD [1] Group 2: Bank Customer Foreign Payments and Receipts - In July 2025, banks recorded foreign income of 49,357 billion RMB and foreign payments of 49,909 billion RMB [1] - Cumulatively, from January to July 2025, banks had foreign income of 326,705 billion RMB and foreign payments of 318,116 billion RMB [1] - In USD terms, foreign income for July 2025 was 6,904 million USD, while foreign payments were 6,981 million USD [1] - From January to July 2025, cumulative foreign income was 45,510 million USD and payments were 44,315 million USD [1]

Core Viewpoint - The foreign exchange market in China has maintained stable operations in July 2025, despite increased volatility in the international currency market, with a notable increase in both bank settlement and sales of foreign exchange. Group 1: Market Performance - In July, bank foreign exchange settlement and sales increased by 12% and 16% respectively, continuing a surplus trend with a total scale of 22.8 billion USD [1] - The exchange rate for enterprises and individuals showed a slight increase in settlement rates while the sales rates remained stable, indicating stable market expectations and active trading [1] Group 2: Cross-Border Capital Flows - Cross-border income and expenditure for non-bank sectors remained at historical highs, with a balanced revenue and expenditure [1] - Net inflow of funds from goods trade increased by 33% month-on-month, maintaining a high level, while net outflows from service trade and investment income rose by 34% and 7% respectively, primarily due to seasonal factors such as summer travel and corporate dividend payouts [1] Group 3: Economic Context - The steady progress of high-quality economic development in China, along with the increasing resilience of the foreign exchange market, is expected to provide strong support for the stable operation of the foreign exchange market [1]