SAFE’s published data suggests that the state commercial banks have roughly 70 percent of their foreign currency assets in dollars (well above SAFE’s dollar share). But that probably understates the state banks’ impact on their dollar market. The state banks’ euro, yen, and other non-dollar foreign currency assets are matched by external euro, yen, and other non-dollar foreign currency denominated liabilities. So, the state banks in aggregate look to be borrowing euros and other currencies to invest in euros and other currencies abroad.
