Chinese banks continue net forex purchases

Chinese banks bought more foreign currency than they sold in April, the ninth consecutive month of net foreign exchange purchases, China's forex regulator said on Tuesday.

Chinese lenders bought 150.6 billion U.S. dollars' worth of foreign currency in April and sold 140.9 billion U.S. dollars, resulting in a net buy of 9.7 billion U.S. dollars, the State Administration of Foreign Exchange (SAFE) said in a statement.

The run of net forex purchases began in August 2013, but the surplus has been narrowing, down from 40.2 billion U.S. dollars in March, 45.7 billion U.S. dollars in February and 73.3 billion U.S. dollars in January.

In the first four months of 2014, Chinese banks bought 667.3 billion U.S. dollars in foreign currency and sold 498.4 billion U.S. dollars, bringing the net purchase volume to 168.9 billion U.S. dollars, according to the SAFE statement.

Forex transactions are a major cause of fluctuations in China's forex reserves. Surpluses may suggest pressure from trans-border capital inflow.