|
 Included among the suspended services are liquidation of spot
positions for clients and some other activities related to
cross-border, onshore and offshore businesses, the sources said.
The sources, speaking on condition that the banks were not named,
said the notices sent to the affected foreign banks by the People's
Bank of China (PBOC) gave no reason for the suspension.
The PBOC did not immediately respond to a request for comment.
The measure follows a slew of steps taken by the Chinese government
to keep the yuan stable since it devalued the currency in August.
The spread between the onshore and offshore markets for the yuan, or
renminbi, has been growing since the devaluation, making it
increasingly difficult for the central bank to manage its currency
and stem an outflow of capital from an economy that is facing its
slowest growth in 25 years.
The sources told Reuters that authorities had warned the banks that
if they engaged in lucrative carry trade, taking advantage of the
different exchange rates, the central bank would move to further
block arbitrage channels.
"This is part of the PBOC's expedient means to stabilize the yuan's
exchange rate," said an executive at a foreign bank contacted
separately.
The sources said the banks might have been targeted due to the large
scale of their cross-border forex businesses.
An economist at a top government think-tank said the measure was a
temporary bid to curb demand for dollars that has been strengthening
toward the end of the year as the gap between the onshore and
offshore yuan exchange rates widens.
"They hope to ease foreign exchange buying pressure and ease
depreciation pressure on the yuan," said the economist who declined
to be identified by name. "But I don't think the authorities will
take very strong capital control measures, they are likely to
reinforce the existing measures."
The move could also ease pressure on the PBOC for direct
intervention in offshore markets to support the yuan, which has
contributed to a fall of more than $400 billion in China's foreign
exchange reserves this year.
UNDER SCRUTINY
In common with forex markets worldwide, there are no official data
on which banks are the most active in trading foreign exchange in
China.
[to top of second column] |
A 2015 Asiamoney survey asking market participants which brokers
they used named Deutsche Bank as the top foreign forex provider in
China, followed by Australia and New Zealand Banking Group, HSBC,
Citigroup and BNP Paribas.
Asked if they had received the central bank's suspension notice,
Citi, Deutsche Bank, HSBC and BNP Paribas declined to comment. There
was no immediate response from ANZ.
Standard Chartered and DBS, which also conduct trading in foreign
exchange in China, did not respond to requests for comment.
The latest move comes just three months since the PBOC ordered banks
to closely scrutinize clients' foreign exchange transactions to
prevent illicit cross-border currency arbitrage between the offshore
and onshore yuan.
On Wednesday, the country's foreign exchange regulator also said it
would improve its reserve position and contingency plans to curb
risks from abnormal cross-border capital flows.
The yuan has come under renewed pressure since late November amid
speculation that Beijing would permit more depreciation after the
International Monetary Fund announced the currency's admission into
the fund's basket of reserve currencies.
The onshore yuan traded in Shanghai has lost 1.44 percent of its
value since the end of November, and has repeatedly hit 4-1/2 year
lows.
The offshore market has traced a similar pattern. The Hong
Kong-traded offshore yuan hit an intraday low of 6.5965 on Wednesday
morning, its weakest since late September 2011.
(Reporting by Shanghai Newsroom; Writing by Lu Jianxin, Nathaniel
Taplin and John Ruwitch; Additional reporting by Lawrence White and
Umesh Desai in Hong Kong, and Kevin Yao in Beijing; Editing by Will
Waterman)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed. |
