China’s foreign exchange regulator, the State Administration of Foreign Exchange, or SAFE, has ordered banks in some trading hubs to limit dollar purchases this month in an attempt to limit capital outflows from the nation.
According to Reuters, citing three people with direct knowledge of the order, all banks in certain trading hubs, including China’s southern financial capital Shenzhen, have been affected.
In December the government suspended forex business for some foreign banks, including Deutsche, DBS and Standard Chartered.
The decision follows news that China’s FX reserves fell by a record $108 billion to $3.33 trillion in December, equating to a daily average decline of $3.5 billion.
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