Banks approved for foreign exchange (forex) transactions sold more foreign exchange than they bought last month in China, data from the nation's top forex regulator showed on Friday.

July is the second month this year that a deficit in forex transactions has been recorded, according to the website of the State Administration of Foreign Exchange.

Banks purchased forex worth 150.8 billion U.S. dollars last month while selling a total of 157.6 billion, creating a deficit of nearly 7 billion U.S. dollars.

Foreign exchange transactions are a major cause of fluctuation in China's foreign exchange reserves, and July's deficit indicates continued outflow of foreign capital.

The deficit in June stood at 400 million U.S. dollars.

In the Jan.-July period, forex purchases stood at 1.06 trillion U.S. dollars, with sales of 930.6 billion U.S. dollars: a surplus of 131.5 billion U.S. dollars.

Foreign exchange inflows have been slowing since May when China's regulatory authorities increased supervision of capital flows, including stricter checks on mismatches between cargo and cash, to crack down on speculation. Endi