China's foreign debt decrease hinted declining solvency risks for foreign creditors, said an official of the State Administration of Foreign Exchange (SAFE) Wednesday.
At the end of September, China's foreign debt totaled 9.7318 trillion yuan or 1.5298 trillion U.S. dollars. In the future, China's broad measure of foreign debt may take on a "new normal" featuring short-term fluctuations alongside the increasingly flexible Renminbi exchange rates, progressing free convertibility of Renminbi under the capital account and changes of global interest rates and foreign exchange rates.
To avoid abnormal cross-border capital flows, SAFE will actively establish a foreign debt and capital flow management system under macro and prudent administration and optimize policy reserves and emergency plans.
Currently, China's foreign debt size changes are mainly impacted by domestic market entities' active repayment of debts to reduce foreign exchange risks, their financial operations to better foreign debt structure and adjustments in deposits of part of foreign financial institutions and non-residents.
By the end of September, banks' outstanding trade financing including paying agent services and usance letter of credit had dropped 31.4 billion U.S. dollars from the end of June 2015.
Latest comments