Moscow. November 19. The people’s Bank of China recently asked several banks to stop cross-border funding of credit institutions outside mainland China, reported Bloomberg familiar with the situation sources.
According to them, the Central Bank also gave an oral order to settlement companies and participating banks in Hong Kong and abroad to stop repo transactions on bonds with mainland banks, two sources said.
Two representatives of foreign branches of state banks of China said that they stopped to get financing from mainland banks.
The Central Bank explained that funding may be provided if necessary for the implementation of real export and import operations, said one source.
Estimated Maybank, restrictions on cross-border loans introduced by the Central Bank of China, are designed to slow down the weakening of the so-called offshore yuan, introduced in 2004 to give investors outside mainland China, the possibility of raising capital in the Chinese currency.
“It is obvious that thus people’s Bank of China is seeking to reduce pressure on the yuan, given the scale of the depreciation since the beginning of November and the growing likelihood of a rate increase by the fed,” said chief currency analyst at Maybank Fiona lim in an interview with Bloomberg.
Since the beginning of the month offshore yuan fell by 1.35% in strength against the us dollar, whereas on the mainland the exchange rate has decreased on 0,95%.