China to ease curbs on banks' yuan trading, simplify regulations

Shanghai

CHINA will relax restrictions on banks' yuan trading starting in 2015, in a small but significant move towards relaxing its capital controls.

The changes will replace daily caps on banks' foreign exchange positions with weekly limits, and for the first time establish unified standards for total foreign exchange positions that banks can hold.

The State Administration of Foreign Exchange (SAFE) published a set of new rules on Tuesday to simplify 14 sets of related regulations and add new provisions liberalising banks' forex trading practices. "The timing is well chosen," said a senior dealer at a major European bank in Shanghai. "With the dollar strengthening globally and emerging market currencies suffering from lingering weakness, it is good time to relax restrictions." The yuan has lost 1.3 …