capital flows

Deposits in Greek banks rose during the first quarter, but they were driven by large increases in holdings by central banks and other ‘monetary financial institutions’. This bucks the general European trend of decreasing holdings by MFIs.

The €8.1bn rise in euro area MFI deposits is 6.6 per cent of total holdings, easily the largest move across the Eurozone. It is, however, smaller than last month’s 10.4 per cent rise of €11.6bn. Cyprus and Slovakia are the only two other countries to record sizeable increases. Read more

From Reuters:-

China’s foreign exchange regulator is considering cutting short-term foreign debt quotas for some commercial banks, three sources familiar with the situation said on Friday, as it seeks to curb speculation over yuan appreciation. Read more

Capital flows are unpredictable. Overseas investors bought up Japanese equities at the fastest pace in three years in January as global asset managers rebalanced portfolios towards the country’s equity market from underweight positions.

Foreign investors bought a net Y1,543bn ($17.3bn) of Japanese equities last month, the most since February 2007, according to Ministry of Finance data published yesterday. Separate data from Nomura show that Japan has seen net inflows from mutual funds so far this year, while markets including the US, China and Hong Kong have experienced net outflows. (more from Lindsay Whipp).