China's funds for foreign exchange end downward trend

BEIJING - Chinese financial institutions' new yuan funds outstanding for foreign exchange last month reversed a dropping trend in the previous four months, data released Sunday showed.

At the end of October, the new yuan funds for foreign exchange rose 12.9 billion yuan ($2.03 billion) from a month earlier, according to data released by the People's Bank of China, China's central bank.

The funds are an important indicator for foreign capital flow in and out of China as well as domestic yuan liquidity.

Wen Bin, a researcher with China Minsheng Bank, said the rise showed that more Chinese people and companies were willing to sell their foreign exchanges, as the central parity rate of the yuan appreciated slightly against the US dollar in October.

Rise in funds for foreign exchange last month was a major contributor to the acceleration of China's money supply increase.

M2, a broad measure of money supply that covers cash in circulation and all deposits, increased 13.5 percent year on year at the end of October, faster than 13.1 percent at the end of September.