The early 2016 rush to move into foreign currency has subsided. This is partly because the domestic financial system has stabilized following the ructions of the second half of 2015, but also because the controls put in place as part of that stabilization have deterred households from getting out of renminbi. In the latest Financial Times Confidential Research survey of Chinese capital outflows, bankers said their customers had shown less interest in buying foreign exchange, but also that tighter capital controls had made it more difficult to get around the $50,000 individual annual cap on acquiring foreign exchange. Although the government has eased policy this year to support growth, bankers said the economic slowdown and the threat of further renminbi depreciation were now the main drivers of foreign exchange demand.
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