China’s Record Forex Demand Poses Headwind for Yuan Rally

China’s purchases of foreign exchange surged to a record high in March, to pay for both imports and overseas investments, a shift that is likely to cap the yuan’s recent advance.

Financial institutions, corporates and individuals bought a total $257.64 billion of foreign currencies last month from local banks, the most in State Administration of Foreign Exchange data going back to 2010. Demand increased under both goods-trade related deals and those for securities investment purposes, the data released late Wednesday show.