To "Prevent Public Panic", Beijing Orders Banks To Keep Capital Outflow Curbs Secret
By Tyler Durden
China is so concerned about the ongoing surge in capital outflows that its forex regulator, SAFE, has taken the unprecedented step of ordering banks to keep its instructions about curbing capital outflows secret and also to ensure that research analysts do not publish any negative views about the yuan according to Reuters. According to bankers from local and foreign banks, both demands are seen as an attempt by the authorities to prevent alarm that could trigger further declines in the yuan.
With the yuan devaluaing by 6% against the dollar last year as a result of hundreds of billions in official outflows (and as much as $1.1 trillion in unofficial since August of 2015 according to Goldman calculations), Beijing has unleashed a flurry of restrictive measures on capital outflows from the State Administration of Foreign Exchange (SAFE), including setting limits on banks’ currency volumes in some cities or provinces and requiring approval for ever smaller transactions. Overnight, the PBOC even unveiled probed into bitcoin exchanges, sending the digital currency plunging over 20%.
Reuters reports that SAFE, which is part of the People’s Bank of China, is insisting in oral instructions to dozens of banks that they don’t reveal its role in such restrictions, six bankers said, which was damaging their relationships with clients since they were unable to explain why they were turning away business. SAFE and the PBOC have yet to respond to requests for comment.
SAFE’s reticence began at least as far back as August, when its Shanghai branch called at least 20 of the major foreign and domestic banks operating in the city to a meeting with the regional heads of several SAFE departments.
A representative from an international bank attending the meeting said there were no written instructions, but a high-ranking SAFE official told them explicitly what was expected of them.
“You must control your forex deficit, but you can’t say that SAFE is controlling capital outflows,” the official told the bankers. The banks were told to “manage sentiment” to prevent public panic, the banker said, and the banks’ research analysts should not broadcast any negative views on the yuan.
As a reminder, while in the US, the real Fake News is anything having to do with relations between Trump and Russia; in China fake news mostly focus on the economy and the currency (as well as virtually everything else).
“They told us not to publish bad house views – analyst house views – on the yuan”, the person said. A second banker on the forex team of an international bank said his bank had received the same instructions.
Where a bank has exceeded the SAFE-set limits for forex transactions in a month, they have to turn business away, but are unable to explain the real reason why, several bankers complained. “We’re not going to tell our customers that (our forex business) has stopped; we just have to find ways to turn down the business we’re not allowed to do,” said a banker …read more
Source: To "Prevent Public Panic", Beijing Orders Banks To Keep Capital Outflow Curbs Secret
100% Pure Garcinia Cambogia Extract – Appetite Suppressant – Carb Blocker Capsules – 2100 MG – 90 Caps
Looking for something special ? Find The Lowest Price HERE Posted January 12th, 2017 in Uncategorized.
