International Law

Fighting a Losing Forex Battle

By Stan

The US dollar has hit a 14-year low against the Japanese yen. The Europeans and the Japanese are pissed off, coordination is necessary, and the US and China are locked in a death grip as the dollar continues its slide.

Trying to get folks to stop betting on a revaluation of the RMB is a losing battle.

Anyway, here is another government finger in the dike as the hot money keeps flowing in:

China yesterday tightened rules on individuals converting and transferring yuan and foreign exchange in and out of the country to curb speculative cash on expectations of the currency’s appreciation.

Overseas individuals or institutions are now each limited to sending foreign currencies to no more than five Chinese individuals to convert into yuan the same day, effective immediately, the State Administration of Foreign Exchange said on its Website.

Money transferals are not allowed on an individual’s or institution’s yuan account if the transactions are from five or more individuals in China converting forex into yuan on the same day.

“The new rules are aimed to curb irregular forex flow through individual channels and fight the forex black market,” China’s top forex regulator said in a statement. (Shanghai Daily)

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Full post as published by China Hearsay on November 26, 2009 (boomark / email).