Chinese banks see forex surplus in February

Chinese banks bought more foreign currency than they sold in February, data from the State Administration of Foreign Exchange showed on Wednesday.

This is the seventh month for the banks to report such a surplus. However, the surplus in February was 37.5 percent lower than that in January, according to the nation's top foreign exchange (forex) regulator.

The banks approved for forex transactions in China purchased foreign currency worth 890.4 billion yuan (145.97 billion U.S. dollars) in February while selling foreign currency worth 610.8 billion yuan, creating a surplus of 279.6 billion yuan.

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

China's central bank widened the yuan's daily trading band from 1 percent to 2 percent on Monday.

From the launch of the yuan's exchange rate reform in 2005 to the end of last year, the currency has appreciated by 35.75 percent against the U.S. dollar, resulting in the currency's "effective" exchange rate rising 42.21 percent, according to the Ministry of Commerce on Tuesday.