China Construction Bank has received a US$10 billion quota from the State Administration of Foreign Exchange (SAFE) to provide financial guarantees to companies engaged in cross-border investments, the South China Morning Post reported. The new quota doubles the lender’s previous quota and is the largest among China’s banks. Mainland banks use such quotas to offer foreign currency loans without seeking SAFE approval for each transaction. However, borrowers must still seek approval from SAFE and the Ministry of Commerce. Analysts told the paper that the increased quota could support mainland companies that trade or want to trade overseas, as it is difficult for those firms to secure funding overseas.
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