New Chinese FX rules a paper tiger
Under the new policies, effective from August 6, Chinese exporters can hold foreign currency denominated income offshore. Previously, most FX income had to be repatriated to China.
"They are trying to make it more difficult for inflows and to encourage outflows. This will slow down FX accumulation, putting less pressure on the government to stabilise the RMB, and lower the costs of maintaining a cheaper currency," said Ken Peng, an economist at Citi in Shanghai. In the first five months of this
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