China FX regulator says new supervision system not related to price fluctuations
[SHANGHAI] China's foreign exchange regulator said on Tuesday that a new business supervision system to be launched next month won't change the way Chinese individuals use currencies and has nothing to do with capital market fluctuations.
The State Administration of Foreign Exchange (SAFE) published the statement after Shanghai's dollar-denominated B shares tumbled nearly 8 per cent on Monday in their worst day in four months.
Some traders attributed the slump to SAFE's individual foreign exchange supervision system, to be launched on Jan. 1, 2016.
SAFE said on its official microblog on Tuesday that the new system is aimed at "expediting individual foreign exchange businesses via bank outlets and electronic banking, and improving business efficiency." The system won't change policies regarding foreign currency use and "has nothing to do with domestic capital markets fluctuations." China-focused investment bank NSBO interpreted the system"as the latest move to combat persistent capital outflows." Some analysts said the B share slump was mainly triggered by profit-taking, as the Shanghai B-share index had risen for 13 sessions in a row, and surged nearly 50 per cent over the past three months.
Monday's decline in Shanghai yuan-denominated A shares was less severe, but still more than 2 per cent.
REUTERS
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