LeapRate Exclusive... China's State Administration of Foreign Exchange (SAFE) has posted (in Chinese only) that it will simplify FX regulations, creating an easier and more convenient environment for foreign investors to move money into and out of the country. SAFE indicated that, among other things, they will simplify regulations, abolish 24 clauses in the rules restricting movement of foreign currency, and eliminate a multitude of documents relating to account opening and registration, and payments of funds in the country.
We at LeapRate view this as another important step Chinese authorities are taking to make the Yuan more convertible, and easier to transact with and trade, which will continue to have wider implications for the retail Forex industry. Just three weeks ago we reported that the People's Bank of China (PBOC) is taking steps to further expand the band in which the Yuan is allowed to float after each daily fixing, which is currently set at +/- 1%. A wider band = more volatility = more interested traders in China.
As China continues to make it easier for both foreign and Chinese investors to trade the Yuan, we expect to continue to see an upsurge in Yuan trading, and in Chinese retail traders taking up FX trading. We reported earlier this month that we've seen a 30% increase in China retail FX trading so far this year, and we expect that trend to continue.
To see the SAFE press release (Chinese only) click here.
For more on the global FX market see the LeapRate Dow Jones Forex Industry Report.