Emerging Insight: CNY - dividend payments to ease appreciation pressure on the margin

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Emerging Insight: CNY - dividend payments to ease appreciation pressure on the margin

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Emerging Insight

CNY - dividend payments to ease

appreciation pressure on the margin

Key takeaways 12 May 2026

GEM Fixed Income Strategy &• Dividend payments will unlikely revert the downward trend for USDCNY, but could

Economics incrementally slow down the pace of the move.

Global

• Net USD supply associated with goods trade was around US$60bn per month in Feb

& Mar. Strategy

Janice Xue

• Assuming US$20bn/month FX demand for dividend payments, that should be easily Emerging Asia FI/FX Strategist

offset by exporters' USD selling flows. Merrill+852 3508Lynch8587(Hong Kong)

janice.xue@bofa.com

By Janice Xue DavidGlobal EMHauner,FI/FX CFAStrategist>>

MLI (UK)

Exhibit 1: Net FX settlement balance tends to positively correlate with USDCNY exchange rate david.hauner@bofa.com

USDCNY vs. Net FX settlement balance Economics

Claudio Irigoyen

Global Economist

USD bn Net FX settlement balace BofAS

100 6.0 claudio.irigoyen@bofa.com

USDCNY (rhs, inverted) See Team Page for List of Analysts 80 6.2

60 6.4

40 6.6

Glossary

20 6.8 PBoC – People’s Bank of China

0 7.0

SAFE – State Administration of Foreign

-20 7.2 Exchange

-40 7.4

-60 7.6

Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 Jul-24 Jan-25 Jul-25 Jan-26

Source: Wind, Bloomberg, BofA Global Research

Note: Net FX settlement refers to the difference between FX sales and FX purchase by commercial banks’ clients

BofA GLOBAL RESEARCH

China in Focus

For Chinese corporates and financial institutions listed on the Hong Kong Exchange, the

peak dividend payment season typically runs from June to August. According to our

estimates, this year’s dividend payments would amount to c.US$61bn from June to