China’s State Administration of Foreign Exchanges, the country’s foreign exchange regulator said on Friday that China could see speculative capital inflows rise this year. The statement comes as major central banks including the U.S. Federal Reserve, the European Central Bank and the Bank of Japan keep monetary policy ultra loose.
The warning came as data showed Chinese banks bought about 54 billion U.S. dollars in foreign currency for clients in December, nearly three times more than November’s purchase. SAFE says that the low interest rates in major economies continue to push up global liquidity and support risk appetite. It also said more measures were needed to curb risks from volatile cross-border capital flows, and necessary steps would be taken.