Beijing is planning to release a new set of rules over the next four months to slow illegal inflows of foreign currency, the South China Morning Post reported, citing state media. The regulations, which have been in the works since 2004, are aimed at speculators illegally bringing foreign currency into China and hedging against the appreciating yuan. These inflows have been blamed for inflating prices and putting upward pressure on the yuan. The new rules will outline punishments for money traffickers and create clearer channels for capital outflows, the report said. China’s State Administration of Foreign Exchanges does not publish figures for speculative inflows, but economists believe the current monthly total is US$5-10 billion.
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