The Chinese Yuan has been varying majorly in recent days. After weakening consecutively for several weeks, the People’s Bank of China intervened in setting the value of the Yuan currency. While the offshore trading can’t be controlled, the PBOC hopes to control its value by limiting the Yuan from declining further. In an attempt to support the currency, the forex regulator of China has instructed the bank to restrain from sharing the details of limiting capital outflows. The research analysts are also advised to keep their negative opinions about the prospects of Yuan from reaching the public.

The authorities have taken this measure to prevent any market trigger that may result in further weakening of Yuan. In the last year, Yuan lost 6% against the dollar and it reached its eight-year low. The State Administration of Foreign Exchange (SAFE) sprung into action implementing various restrictive measures to control capital outflow. New limits are enforced on the currency volume of banks and even smaller transactions must gain approval.

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China Holds Back Forex Data To Support Yuan

Many local and foreign banks are advised to keep the role of SAFE a secret in imposing restrictions. Many banks have started complaining that it affects their customer relationship because they couldn’t answer why transactions are not carried out. Even though there are no written instructions, the bank officials confirmed that higher officials explicitly stated what was expected. The banks must take measures to control forex deficit, but they should not reveal that the controls are employed by SAFE.