PBOC said to suspend forex business at three foreign banks

The People’s Bank of China has suspended at least three foreign banks from settling offshore yuan transactions in the onshore market for three months, Reuters reported, citing thee unnamed sources. The sources said that authorities had warned the banks that if they engaged in lucrative carry trade – taking advantage of the different exchange rates – the central bank would move to further block arbitrage channels. Three financial market sources in Europe said Deutsche Bank was among those that had part of its China-based foreign exchange business suspended. The notices sent to the banks in question apparently gave no reason for the suspension.