China Fires a Warning Shot at Yuan Speculators With Bank Bans
- At least two banks banned from cross-border currency dealing
- Offshore yuan erases 0.5% drop on intervention speculation
PBOC Suspends Some Cross-Border Yuan Business
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China has a message for currency speculators: the free lunch is over.
The People’s Bank of China has suspended at least two foreign banks from conducting some cross-border yuan business until late March, according to people with direct knowledge of the matter. The clampdown comes as the growing offshore-onshore spread makes it profitable for those who skirt capital controls to buy the currency at a discount in Hong Kong and sell it in Shanghai.