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]

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 settlements reached 98,835 billion RMB, while cumulative 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 Exchange Income and Payments - In July 2025, banks recorded foreign exchange income from customers of 49,357 billion RMB and payments of 49,909 billion RMB [1] - Cumulatively, from January to July 2025, banks had foreign exchange income of 326,705 billion RMB and payments of 318,116 billion RMB [1] - In USD terms, customer foreign exchange income in July 2025 was 6,904 million USD, while payments were 6,981 million USD [1] - From January to July 2025, cumulative foreign exchange income from customers was 45,510 million USD, with payments totaling 44,315 million USD [1]