China SAFE telling banks to keep instructions about curbing capital outflows secret

Author: Eamonn Sheridan | Category: News

Reuters have posted up a story on China's FX regulator, SAFE (State Administration of Foreign Exchange):

Reuters quoting 'several bankers':
  • SAFE is telling banks to keep its instructions about curbing capital outflows secret
  • And also to ensure that research analysts keep any negative views about the yuan's prospects to themselves
SAFE has issued oral instructions to dozens of banks that they don't reveal its role in such restrictions:
  • A representative from an international bank attending the meeting said there were no written instructions, but a high-ranking SAFE official told them explicitly what was expected of them."You must control your forex deficit, but you can't say that SAFE is controlling capital outflows," the official told the bankers.
  • The banks were told to "manage sentiment" to prevent public panic, the banker said, and the banks' research analysts should not broadcast any negative views on the yuan.
Reuters says SAFE and the PBOC have yet to respond to requests for comment.

Its worth reading the whole thing, much more here.