Chinese regulators are stamping out moves by banks to shift renminbi out of the country as they attack one of the few loopholes remaining in the country's strict new capital controls regime.
The tightening is another setback for the Chinese government's larger strategy of internationalising its currency — a goal that has taken a back seat to stabilising capital outflows and the renminbi's depreciation against the dollar.
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According to several people briefed on rules introduced this month, banks in Shanghai must "import" 100 yuan for every 100 yuan they allow a client to remit overseas, ensuring no net outflows of the Chinese currency. Shanghai-based banks had been allowed to remit 60 yuan overseas for every 100 yuan they brought back into China.
The clampdown goes even further in Beijing where banks must import 100 yuan for every 80 yuan they remit overseas on behalf of clients, ensuring a net inflow into the capital. The People's Bank of China declined to comment.