In the first half of 2023, China's foreign exchange receipts and payments have demonstrated the following characteristics:

First, cross-border capital flows remained stable with net inflow momentum. In the first half of 2023, the total amount of cross-border receipts and payments by non-banking sectors exceeded $6 trillion, which was the second highest level in history during the same period. In terms of the balance, foreign-related receipts and payments have seen a surplus. Specifically, the surplus of foreign-related receipts and payments reached a seasonal high in January 2023. This can be attributed to factors such as enterprises rushing to collect foreign exchange before Spring Festival. During the February-May period, the amount of foreign-related receipts and payments remained basically the same. The size of surplus rebounded to $12 billion in June. Based on quarterly data, we have also seen a surplus for two consecutive quarters.

Second, foreign exchange settlement and sales by banks recorded a small surplus, and the supply and demand of the overseas foreign exchange market remained basically balanced. In the first half of the year, the overall foreign exchange settlement and sales by banks recorded a surplus, and the supply and demand of foreign exchange sustained a basic balance upon consideration of other factors in this regard. According to quarterly data, foreign exchange settlement and sales by banks recorded a small deficit in the first quarter and this turned into a surplus in the second quarter. Particularly in June, despite the increasingly complex external environment, foreign exchange settlement and sales by banks recorded a surplus of $8.2 billion, which was significantly higher than the monthly average in the previous months.

Third, the foreign exchange sales rate increased, and the foreign exchange financing by enterprises remained stable. In the first half of 2023, the sales rate, a measure of customers' willingness to buy foreign exchange, which is the ratio of foreign exchange purchased by customers from banks to foreign-related foreign exchange payments made by customers, stood at 69.2%, up 3 percentage points over the same period in 2022. In terms of foreign exchange financing, as of the end of June 2023, the outstanding domestic foreign exchange loans of market participants, such as Chinese enterprises, amounted to $274.9 billion, an increase of $3.7 billion from the end of 2022. The balance of foreign currency financing under international trade, such as import refinancing and forward letter of credit, stood at $67.4 billion, declining $9.4 billion from the end of 2022.　　

Fourth, the foreign exchange settlement ratio steadily increased, and the balance of enterprises' foreign exchange deposits declined. In the first half of 2023, the foreign exchange settlement ratio, a measure of customers' willingness to settle foreign exchange, which is the ratio of foreign exchange sold by customers to banks to customers' foreign-related foreign exchange receipts, reached 67.5%, up by 0.5 percentage point over the same period in 2022. As of the end of June 2023, domestic foreign exchange deposits held by Chinese enterprises and other market participants totaled $606.1 billion, declining $28 billion from the end of 2022. This suggests that the general willingness among market entities to hold foreign exchange remains stable.　

Fifth, the volume of China's foreign exchange reserves remained basically stable. By the end of June 2023, China's foreign exchange reserves totaled $3.1930 trillion yuan, $65.3 billion more than the end of 2022, mainly due to the combined effects of currency translation, asset price changes and other factors.