Regulators have raised the debt limit that foreign banks can borrow from abroad in an apparent bid to bring more foreign investment into China, The Wall Street Journal reported, citing sources familiar with the matter. Foreign banks in China often borrow from their headquarters abroad to bring money into the country for investment. While quotas vary according to each bank, sources said that regulators from the National Reform and Development Commission, the country’s economic planner, have granted raises ranging from the high double-digits to more than double last year’s cap. The move may be an effort to bolster foreign investment into China, which fell by 0.9% in February – the fourth straight month of decline. The increase in the quota may also encourage more purchases of the yuan, which experienced a heavy sell-off in recent weeks on poor economic data.
Categories