Banks' August forex surplus hits $37.8b

Chinese banks built up a foreign exchange surplus of US$37.8 billion in August as they purchased more foreign currencies than they sold, state media reported. Institutional and individual clients sold US$144.4 billion in foreign currencies to banks in August but purchased only US$106.5 billion, the State Administration of Foreign Exchange said in a statement on September 28. Including August, the amount of foreign currency accumulated so far this year reached US$354.8 billion, nearing the full-year 2010 level of US$397.7 billion, which represented a 51% annual increase. Foreign exchange surpluses – which do not include banks’ own forex transactions or interbank transactions – make up part of China’s foreign exchange reserves, along with current account surpluses and foreign direct investment flow.