Off The Wire
UPDATE 1-China's Sept net gold imports via Hong Kong falls to over 7-yr low
Oct 25 (Reuters) - China's net gold imports via main conduit Hong Kong in September fell to its lowest since May 2011, as the country likely limited import quotas for its banks.
Imports via Hong Kong to China, the world's top consumer of the metal, decreased to 11.059 tonnes in September from 31.857 tonnes in August, according to data from the Hong Kong Census and Statistics Department.
That is the lowest since May 2011, when imports were at 4.37 tonnes.
Total gold imports via Hong Kong dived about 63 percent to 12.707 tonnes in September from 34.22 tonnes in August.
Gold imports could have fallen due to China limiting import quotas for the banks, said Samson Li, a Hong Kong-based senior precious metals analyst at Refinitiv GFMS.
China allows 13 banks, including three foreign lenders, to import gold, according to the Shanghai Gold Exchange.
The banks would have saved up their unused quotas for future months, on expectations that the yuan may continue to fall for longer, since a weaker yuan could translate into bigger gold premiums in China and thereby higher profits, he added.
The yuan is on track for a seventh straight monthly decline.
"Another possibility... is that the People's Bank of China (PBOC) may (have) slowed the import approvals to limit the outflow of the yuan," Li said.
In August, China's net gold imports via Hong Kong fell 29 percent from July as Beijing curbed import quotas for banks amid a trade tussle with the United States. China does not provide trade data on gold, and the Hong Kong figures serve as a proxy for flows to the mainland.
The Hong Kong data, however, might not provide a full picture of Chinese purchases as gold is also imported via Shanghai and Beijing.
(Reporting by Sumita Layek in Bengaluru, Editing by Sherry Jacob-Phillips and Christian Schmollinger)Outside U.S. +91 8067491638; Reuters Messaging: Sumita.Layek.firstname.lastname@example.org))