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China eases rules on foreign banks' yuan trades
[BEIJING] China has made it easier for foreign banks without full yuan business licenses to buy or sell foreign currencies against the yuan, its foreign exchange regulator said on Thursday.
Under the rules issued by the State Administration of Foreign Exchange (SAFE), foreign banks that have not yet started a yuan business in China will be allowed to open special yuan accounts for currency dealings with their clients.
Chinese firms typically sell their foreign currency income from exports to banks and buy them back for importing. Banks settle their currency positions with the central bank.
Foreign banks will be allowed to withdraw cash from their special yuan accounts. But each bank's outstanding funds in its yuan account cannot exceed 20 per cent of its registered capital or its operational capital, the SAFE said.
China, which aims to boost the yuan's global clout, has been loosening its capital controls to make the yuan fully convertible, but analysts say such changes will be gradual.