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Yuan buying limited to US$10,000 a day
(Shenzhen Daily)
Updated: 2004-03-15 15:48

China has halved the amount of dollars non-residents can change into yuan as it wages a battle to prevent people from speculating on a possible revaluation of the pegged currency.

From this month, non-mainland Chinese are limited to buying US$10,000 worth of yuan a day, down from US$20,000 previously, and up to a maximum US$50,000 a month, the State Administration of Foreign Exchange (SAFE ) said in a statement on its Web site.

Guo Shuqing, director of the SAFE, was cited last week by State media as saying expectations of a yuan revaluation could backfire.

Rampant speculation -- to the tune of US$40-US$50 billion in hot money inflows last year according to Standard & Poor's -- is applying upward pressure on the yuan, making it tough for China to rein in rapid money growth amid growing fears of inflation.

Approval from the SAFE was needed on a case-by-case basis for sums in excess of new ceilings. The new rules applied to all designated foreign exchange banks.

The Bank of China -- the nation's premier foreign exchange bank -- declined comment.

"We've been told it's to curb speculation," said a teller at a branch of the Bank of China in Shanghai's financial district.

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