BEIJING - China's banks reported a significant drop in their combined foreign exchange (forex) settlement deficit in November, official data showed Thursday.

The deficit last month declined 47 percent from October to $6.3 billion, according to the State Administration of Foreign Exchange. Forex purchases by banks stood at $185.7 billion, while sales reached $192 billion.

The forex supply and demand in the domestic market became more balanced, said Wang Chunying, spokesperson of the administration.

There was a 34.3-billion-USD net capital inflow in China under goods trade in November, up 4 percent from a month ago, and the net inflow of foreign direct investment gained rapidly. Foreign investors also increased their holdings in China's stock market, Wang said.

Wang predicted goods trade and foreign direct investment will continue to contribute to capital inflows in China, playing a fundamental role in stabilizing the forex market.

In the first 11 months, forex purchases by banks stood at $2.36 trillion, while sales reached $2.26 trillion.