China’s State Administration of Foreign Exchange has further tightened rules governing cross-border money transfers by individuals in its latest effort to cut out inflows of speculative capital, or "hot money," The Wall Street Journal reported. The new measures limit the number of bank accounts owned by any one person that can be used in certain foreign-exchange transactions. In doing this, the forex regulator hopes to ensure individuals don’t act as proxies in elaborate foreign-exchange deals that circumvent existing rules. The move doesn’t relate directly to the domestic currency’s exchange rate but closes a loophole in the system. It also reinforces Beijing’s intention to maintain control over capital flows following growing concerns of hot money entering the country.
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