China had net capital inflows throughout the first quarter, although the surplus narrowed each month during the period, according to the State Administration of Foreign Exchange.Â
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In the first quarter, domestic banks' foreign-exchange settlements totaled 516.8 billion USD and foreign-exchange sales reached 357.5 billion USD, yielding a surplus of 159.2 billion USD. That was up 57 percent from the previous year.Â
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But the surplus fell to 40.2 billion USD in March from 45.7 billion USD in February and 73.3 billion USD in January.Â
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"Positive changes are taking place in terms of cross-border capital flows, although the current situation of net inflows continues," Guan Tao, who runs SAFE's balance-of-payments department, told reporters on Thursday in Beijing.Â
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The "positive changes" mainly refer to Chinese companies' growing inclination to increase their foreign-currency holdings, he said In March, foreign-currency deposits increased by 14.4 billion USD, rising 3 percent from the average level of the previous two months. Guan didn't specify whether these were corporate or individual deposits, or both.Â
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The government is aiming for "a balance of supply and demand for foreign exchange and hopes to improve macroeconomic regulation and control".Â
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The depreciation of the CNY since mid-February has slowed down foreign-currency settlements by Chinese companies, which are waiting for signs of the currency's longer-term trend.Â
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Li Wei, a Shanghai-based economist at Standard Chartered Plc, said the CNY's weakening is a temporary phenomenon and global investors' interest in the currency will continue to grow with its internationalization and the diversification of channels to use it.Â
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"We estimate that the CNY will rise to 6.04 to the dollar by the end of this year." Guan said it's normal for the CNY to rise and fall against the dollar and that the exchange rate will become more flexible as market forces are given more emphasis. Â
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China had net capital inflows throughout the first quarter, although the surplus narrowed each month during the period, according to the State Administration of Foreign Exchange. 
