亚洲外汇聚焦人民币：更多外汇出售，但并不急于求成

Asian FX Focus: RMB CurrenciesMainland China More FX sales, but not in a rush ◆Chinese corporates increased FX conversion and hedges inApril,andresidents slowedtheirFXpurchases Jingyang ChenAsian FX StrategistThe Hongkong and Shanghai Banking Corporation Limitedjingyang.chen@hsbc.com.hk+852 2996 6558 ◆Butthis does not point toa regimeshift,withexporters’FXconversion ratiostillatc30% and no sign of quickrepatriation Joey ChewHead of Asia FX ResearchThe Hongkong and Shanghai Banking CorporationLimited, Singapore Branchjoey.s.chew@hsbc.com.sg+65 6658 5186 ◆A challenging domesticoutlookand a riseinFX demand fordividendspayable should limit USD liquidation in the near term Paul MackelGlobal Head of FX ResearchHSBC Bank plcpaulmackel@hsbc.com+44 203 268 3252 Chinese corporates’FX conversion ratioisa hot topicagain given the de-dollarisationtheme.SAFE’slatestFXsettlementsuggestedthere wasanotherincreaseinnetFX sales in ApriltoUSD5.9bnfromUSD0.1bn in March, but thesizeremainslowcompared toUSD45.4bn and USD15.8bn in September and October 2024,amidUSD weakness(Chart 1). Lenny JinGlobal FX StrategistThe Hongkong and Shanghai Banking Corporation Limitedlenny.jin@hsbc.com.hk+852 2996 6549 ◆Corporates convertedmore oftheirexports proceeds.There wasUSD32bnofnet FX sales for goods’trade, accountingfor 33% of the total trade surplusinApril.This meansthenet FX conversion ratioreboundedfrom21%in 1Q25 toaroundtheaveragelevel (c30%) between 2022and 2024(Chart 2). Thiswas stillsubdued compared totheaverage of 55% back in August-October 2024. ◆Residentsloweredtheir net FX purchasesfor their services trade andincome deficitto USD13bnin Aprilfrom USD16bn inMarch. We noted localshad bought USD64bn ofFXfor tourism back in December 2024 and the followingJanuary, but theirenthusiasmhas cooledgivenbroadUSD weakness andelevated global market volatilitythis year. ◆Locals have also added FX hedges through short USD-RMB forwardpositions.The onshore FX forward market added another USD15bnofshortUSD-RMB positions on a net basis in April, the biggest amount sinceSeptember2024(Chart 3). ◆However, there was still elevated net FX purchasesof USD9bn for financialoutflows in April.Foreigninvestors turned more bearish onChineseequityfollowing therapidtariff escalation,which was reflectedinUSD2.7bn worth ofequitiessales by foreignersin the Morningstar data(Chart 4).In1Q25,foreigners boughta total of USD3.9bn.Mainland investors continued to showinterest inoverseasassets, buying another USD21.5bn worth of Hong Kongshares through the Southbound Stock Connectin April(Chart5).The outflowshave taken a breatherin May, slowingtoUSD1.4bnmonth-to-date,but there isno sign of net repatriation of previous investment yet. HSBC Global Research Podcasts Listen to our insights Find out more Issuer of report:The Hongkong and ShanghaiBanking Corporation Limited Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which forms part of it. View HSBC Global Research at:https://www.research.hsbc.com Inlight of the ongoing USD‘trust issues’, exporters have increased their FX conversion andhedges, while residents moderated their FXpurchases.But so far theSAFEsettlementdatadoesnot point toa rushtosellFX. Whilewe understand structural questionsaroundthe US and USD-denominated assets, it isalsoquestionable if China’sdomesticconditions support significant repatriation or FXconversionbackinto the RMB. As we argued in a previous note,sustainedincreasesin netFX saleshaveusuallybeenassociatedwith the RMB’s strong yield advantage against the USDand an upcycle in China’s domestic industrial growth(seeAsian FX Focus: RMB: No rush tosell, 19 August 2024).However,currently banks arelowering theirRMB deposit rates to makeroom forsofterlending rates, while the domestic industrial cycle remains subdued under weaklocaldemand and elevated tariff risks.Back in August-October 2024, the bout of FX saleswasalso short-lived. Inaddition, despite the recent de-escalation in US-China trade tensions, uncertainties stilllinger. Since the first period ofUS-Chinatrade tensions in 2018-19, Chinse corporates havealready gradually expanded their overseas direct investments(ODI), whichincreasedFXdemandoverall. Consideringthepotential supply chain reconfiguration, FXdemandforODImay also grow in the medium term. Looking forward,theseasonal pick-up in FX demand for corporates’offshore dividendpayments willalsomatter. We notedChinesecompanies listed in Hong Kong are payingtheir final dividends earlier this year, withthe peak in May and June, compared totypicallyJune to August in previous years(Chart 6).The dividend paymentstended to coincidewithaseasonalpick-up in net FX purchasesfortheincome deficit in those months.We thinkthis is becausesome mainland Chinese corporates may need to sell RMB-HKD to fundtheirdividend payments in HKD.In terms of companies’dividend payments for onshoreequitie