Foreign-exchange sales by China’s central bank hit a four-month low in December, government figures show, indicating easing pressure on the yuan to weaken.
The People’s Bank of China (PBOC) sold 4.0 billion yuan ($590 million) worth of foreign currency to banks last month, the lowest figure since August and down from November’s 57.1 billion yuan, according to Caixin’s calculations based on official data released Wednesday.
The sale left the central bank’s outstanding foreign-exchange purchase position at 21.256 trillion yuan, down from 21.260 trillion yuan in November.
A decline in the total indicates pressure on the yuan to weaken as companies and individuals preferred to hold foreign currency rather than the yuan, or to move assets overseas, which increases capital outflows. Therefore, a smaller fall suggests the demand for foreign currency was less strong.
December was the fifth month in a row the PBOC has sold its foreign-currency holdings.