China's SAFE data shows FX demand, but stability still favoured

China's FX purchase figures released by the State Administration of Foreign Exchange (SAFE) show that onshore banks net bought USD 17.3bn of foreign currency for themselves and their clients in April. 

This is lower than the USD 66bn in March, likely helped by the stabilisation of the Chinese yuan (CNY). SAFE data shows that banks have net bought USD 145bn of foreign currency on behalf of their clients since September 2014. This is likely driven by strengthening of the USD alongside China's weakening economy. 

"Near-term, we expect USD-CNY spot to remain steady ahead of the IMF meeting on the CNY's Special Drawing Rights inclusion and the US and China holding their seventh Strategic and Economic Dialogue meeting in late June", says Standard Chartered.