Chinese regulators have raised the upper limit on outstanding overseas loans by domestic firms for the first time, in a move that could ease appreciation pressure on the RMB, reported Caixin.
China’s central bank and the top foreign exchange regulator on Tuesday announced a decision to raise a key parameter on domestic nonfinancial firms’ overseas lending to 0.5 from 0.3, giving them more room to lend money to their overseas units, including wholly owned subsidiaries and other companies in which they hold stakes.
The move may allow domestic firms to have more money used overseas and less money sent back home, reducing capital inflows to China. Cross-border capital flows are a key factor affecting the exchange rate of the RMB, said Caixin.
You must log in to post a comment.