China tighten policies for foreign currency exchange by individuals

China money exchange

China money exchangeChina will tighten even more the foreign currency exchange by individuals, as part of the policies against the colossal flight of capital from the country amid the depreciation of the yuan. The individuals customers wishing to exchange yuan into foreign currency, the future will have to submit more detailed information to the bank and explain the relevant funds, except that necessarily require identity documents, said the State Administration of Foreign Exchange (SAFE). Each year, an individuals has the right to exchange an amount equal to 50,000 USD, states the agency.

The purpose of this measure is to counteract the illegal transactions, money laundering and illegal banks, states the regulator, which aims to ensure the multiply unannounced checks and strengthen sanctions. The banks will in turn be obliged to check the accuracy of information provided.

Moreover, in July, financial institutions will have to inform the Chinese central bank to any international transfer over 200,000 CNY (28,800 USD) in the policy against money laundering.

The communist regime in the country tightening measures to curb the colossal flight of capital from China. About 1 trillion USD were exported from China in 2015 and the large-scale capital flight continued last year, reaching 690 billion USD for the first ten months of 2016, estimated the analysts.

The slowdown of the Chinese economy, the weak yuan and rising interest rates in the United States (which makes it more attractive assets in dollar terms) is urging depositors to place their money in other currencies.

This puts pressure on the yuan, which is now at the lowest level against the dollar in eight years.

more recommended stories