CHINA ORDERS BANKS TO STOP PURCHASING U.S. DOLLARS
Superstation95.com
Jan 10, 2016
In a stunning move, China has suspended some banks from Foreign Exchange markets and ordered other banks to stop buying Dollars.
China’s foreign exchange regulator has ordered banks in some of the country’s major import and export centers to limit purchases of U.S. dollars this month, three people with direct knowledge said, in the latest attempt to stem capital outflows.
The move comes as China reported its biggest annual drop in foreign exchange reserves on record in 2015, while the central bank has allowed a sharp slide in the Yuan currency to multi-year lows, raising fears of more capital flight.
All banks in certain trading hubs, including Shenzhen, received the order recently, the people added. They declined to be identified because they are not allowed to speak to the media.
The total amount of U.S. dollars sold to clients in January for a bank in one of these hubs cannot exceed the amount sold in December, according to the people.
“They have asked us to limit our purchase amount and there are targets, but it mainly relates to institutions and enterprises, there is no change to the policy on individuals,” said one person.
Officials at State Administration of Foreign Exchange did not immediately respond to comment.
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