China’s authorities have sounded the alarm in recent weeks over the risk of capital outflows from the economy, but according to Reuters there was little evidence at Beijing and Shanghai banks on Tuesday that Chinese individuals were rushing to lock in 2017 quotas to buy foreign exchange. Only a trickle of people at banks were seen selling yuan for dollars on the first business day of the new year, when buyers in theory could have made use of their quotas. Under China’s capital controls, individuals are permitted to buy up to $50,000 in foreign exchange a year, and data shows January is typically a standout month for onshore foreign currency deposits. The yuan shed nearly 7% against the dollar last year, its poorest showing since 1994, as policymakers struggled to contain capital outflows and preserve foreign exchange reserves.
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