Analysts: Relaxed rules will have little effect on RMB

China revised rules governing foreign exchange Wednesday, though the loosened restrictions are unlikely to alter the renminbi’s (RMB) near-term trajectory, the Wall Street Journal reported, citing analysts studying the situation. The new rules removed requirements for domestic firms to put all of their foreign currency into the local banking system, and reduced approvals needed for overseas investments. Goldman Sachs economist Hong Liang was quoted as saying that pressures on the RMB from currency inflows "are unlikely to be fundamentally alleviated" until the yuan’s market value is closer to fundamentals. Speculative "hot money" pouring in from overseas has impaired the government’s ability to adjust interest rates, resulting in an increase in liquidity in the country’s banking system. The renminbi closed at 6.8614 against the US dollar Thursday.