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China forex regulator sees volatile capital flows in 2015

Updated: Feb 16,2015 7:22 AM     Xinhua

BEIJING — China’s cross-border capital flows will remain volatile this year amid uncertainties both at home and abroad, the country’s forex regulator said on Feb 15.

As China gradually moves to make its foreign exchange mechanism more market-oriented, the structure of “trade surplus and capital outflow” will become increasingly normal, the State Administration of Foreign Exchange (SAFE) said in a report.

Meanwhile, easing monetary policies in some major economies will put emerging markets under growing pressure from capital outflows, SAFE noted.

China’s capital account deficit widened sharply in the last quarter of 2014 to $91.2 billion, compared with the third quarter’s $9 billion. The widening deficit fanned concerns of massive capital outflows from the country as economic growth slowed.

The SAFE reiterated that the capital outflow remains “moderate and within the limit” and the liquidity in the foreign exchange market remains “ample”.