China sets new rules on overseas yuan loans in fight to curb outflows - sources
Source: Reuters
ReutersNovember 30, 2016
SHANGHAI, Dec 1 (Reuters) - China's central bank has circulated new rules for companies which make yuan-denominated loans to overseas entities, sources with direct knowledge of the matter said, the latest in a slew of measures by Beijing to control capital outflows.
The move comes after the yuan fell to more than eight-year lows, fueling attempts by firms to get their money out and leading to Beijing taking aim at outbound investments and underground banks suspected of aiding capital flight.
The party making a yuan loan to an overseas entity must first register the loan with the State Administration of Foreign Exchange (SAFE) - the foreign exchange regulator - and must keep the loan within a certain limit, the sources told Reuters on Thursday. The limit was not specified.
(Snip)
The lender also has to have been registered for at least a year, and the borrower has to be a related entity, according to the guidelines.
Read more: https://www.yahoo.com/news/china-sets-rules-overseas-yuan-025311801.html
Lucky Luciano
(11,254 posts)I wonder how long they can do this.
Feeling the Bern
(3,839 posts)They see the dollar deflating under Trump, just like the Euro did with Brexit.
Face it, the RMB will become the world's dominate currency by the midterm elections at the rate Europe and the US are shooting themselves in the foot. Hell, the dollar has devalues .4 RMB since election day.
Lucky Luciano
(11,254 posts)Up to 6.9/$ now. Could take a while to cross the psychological 7/$ level though. The Chinese are burning through their dollar reserves supporting the yuan, but they have let the daily fix slip a lot in line with other currencies since the election.