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EconomyChina Economy

China’s forex regulator pledges to open up market, tighten capital oversight

SAFE will expand forex market access and monitor cross-border capital flows while PBOC will push panda bonds and offshore yuan market

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China will also advance the opening-up of its capital account and continue its reform of banking foreign-exchange business practices. Photo: dpa
Xinyi Wuin Beijing
China’s foreign exchange regulator has pledged to help further open up the forex market, while strengthening oversight of cross-border capital flows in the second half of the year.

“[We will] steadily expand the institutional opening-up in the foreign exchange sector,” the State Administration of Foreign Exchange (SAFE) said in a statement on Sunday.

The regulator, which had held a work meeting on Saturday to lay out key priorities for the rest of the year, also pledged to promote trade facilitation reforms and introduce a package of measures to optimise foreign-exchange management for the current account.

To deepen the development of the forex market, authorities will reduce exchange-rate hedging costs for small and medium-sized enterprises by promoting multiparty cooperation, and support regions such as the Hainan free-trade port to pilot innovations in foreign-exchange management.
“[We will] strengthen the monitoring of cross-border capital flows, continuously refine macroprudential and expectation management, and take comprehensive measures to maintain foreign exchange market stability,” the regulator added.
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SAFE also pledged to strengthen oversight of market trading activities and “crack down heavily on illegal cross-border financial activities” by leveraging technologies such as artificial intelligence.

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