China’s financial regulator asked some banks to report additional foreign-exchange transaction data on top of its routine quarterly requests, according to people familiar with the matter, adding to earlier surveys on currency trading and capital flows.
(Bloomberg) — China’s financial regulator asked some banks to report additional foreign-exchange transaction data on top of its routine quarterly requests, according to people familiar with the matter, adding to earlier surveys on currency trading and capital flows.
The National Administration of Financial Regulation last week ordered at least three commercial banks to report a detailed set of data, including quarterly and annual spot and derivative currency trading volume, said the people who asked not to be named as they aren’t authorized to discuss the matter publicly.
That’s after onshore lenders submitted a routine report on their second-quarter banking business to the regulator in early July, the people said. Authorities didn’t state the purpose of the additional scrutiny.
Last month, one regional lender was called out for excessive proprietary trading, with the volume breaching a limit of 15 times the size of transactions done on behalf of clients, people familiar with the matter said. It’s not clear if this incident is related to latest request for more data. NAFR didn’t immediately reply to a Bloomberg query.
The onshore yuan’s weakness could have also been the reason for the NAFR move. The Chinese currency has been under pressure as a slew of economic data from retail sales to exports showed stuttering growth. A reluctance from authorities to announce large-scale stimulus measures and a wide US-China interest-rate differential have also been weighing on the yuan.
The yuan rose from a seven-month low touched in late June partly due to continuous support from the People’s Bank of China’s stronger-than-expected fixings. The central bank’s move to relax some of its capital controls to lure more inflows also supported the yuan. Moreover, regulators were also said to have stepped up scrutiny of currency trading and cross-border capital flows in June.
The onshore yuan fell 0.2% to 7.18 per dollar, after rising as much as 0.3% earlier.
–With assistance from Zhang Dingmin.
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