China stiffens rules on overseas cash withdrawals from personal bank cards

China’s foreign exchange regulator, over the last weekend, announced to bolster the rules on overseas cash withdrawals from personal bank cards to control money laundering, terrorist financing and tax evasion. The State Administration of Foreign Exchange stated that the total amount of overseas cash withdrawals from all domestic bank cards owned by one person would be capped at CNY 100,000 per person each year. If an individual surpasses the annual cap in a year, his or her overseas withdrawals would be suspended in that year and the following year, noted Commerzbank in a research report.

The new rules can “prevent law breakers from withdrawing a huge amount of cash with different cards from different bank,” stated authority. The new policy strengthens the opinion that China continues to be vigilant on cross-border money flows, partly due to concerns of capital flight. But the risks of capital outflows have been diminishing, at least for now, stated Commerzbank.

Meanwhile, the official manufacturing PMI moderated a bit in December. The figure came in at 51.5, rising strongly from 50.8 previously. However, the market leans towards the positive camp after the release of the Caixin PMI.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Chinese yuan was neutral at -6.53624, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -77.3822. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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