China’s commercial banks acquire net $289B of forex in January-July period

China’s commercial banks scooped up a net $289.4 billion in foreign exchange during the first seven months of 2026. That figure, reported via the State Administration of Foreign Exchange (SAFE), underscores the sheer volume of currency flowing through the world’s second-largest economy as its trade machine continues to run hot.

SAFE had previously reported a $271.2 billion surplus in banks’ forex settlement and sales for just the January-to-June window, meaning July alone added meaningfully to the pile.

Cross-border flows are surging

Total cross-border receipts and payments hit $9.2 trillion in the first half of 2026, a 21% jump compared to the same period last year.

The yuan’s quiet global march

The renminbi’s share of China’s cross-border receipts and payments climbed to 52.9% in the first half of 2026. That means more than half of China’s international transactions are now being settled in its own currency rather than in dollars, euros, or other foreign currencies.

When a country can settle more than half its cross-border trade in its own currency, it reduces its dependence on dollar liquidity and insulates itself from some of the transmission effects of US monetary policy.

What the reserves picture looks like

China’s official foreign exchange reserves stood at $3.4163 trillion at the end of June 2026. Despite massive cross-border flows and net forex purchases by commercial banks, China isn’t dramatically accumulating or depleting its official reserves, with the commercial banking system absorbing most of the flow rather than routing it to the PBOC for reserve accumulation.

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