Furthermore, since the beginning of this year, Chinese banks’ valet foreign-exchange settlement (foreign-exchange purchases that designated banks make for their clients and themselves) has outstripped corresponding sales, resulting in a consistently large surplus – also an indication of increased capital inflows. The difference, which banks offset through transactions in the inter-bank currency market, has a significant impact on China’s foreign-exchange reserves, but is not equivalent to the net change in foreign-exchange reserves during the same period.