China witnessed a fourth straight month of net foreign exchange purchases among the central bank and commercial lenders, which suggests continuous capital inflows, as shown by data released by the People's Bank of China (PBOC) on Monday.
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Banks brought in nearly CNY 236.3 billion (USD 38.25 billion) worth of foreign exchange last month on a net basis, boosting the total yuan holdings for purchasing foreign currency to nearly CNY 27.1 trillion.
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Net purchases in March, however, moderated from CNY 295.4 billion in February and a record CNY 683.7 billion in January.
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Banks made total net purchases of less than CNY 500 billion throughout 2012.
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"The net purchase in March is not because of a trade surplus, it's mainly due to the increase of money inflows following the higher expectation of yuan appreciation," said Zhong Zhengsheng, an analyst at Everbright Securities Co Ltd.
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March witnessed China's first trade deficit since February 2012, as imports surged by 14.1 percent from a year previously, according to data released by the Ministry of Commerce earlier this month.