Daily Management Review

Chinese Central Bank lifts restrictions on gold imports for banks


According to sources cited by the Financial Times, the People's Bank of China (PBOC), the nation's central bank, has relaxed temporary limits on gold imports placed on some financial institutions to support the yuan.

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The sources claim that the central bank first loosened the informal limitations last week, then removed them on Friday.

China's central bank uses the quota system to control gold imports for commercial banks.

The PBOC cut import limits for banks and ceased issuance of them in August to prevent a rise in purchases of the metal as protection against a depreciating local currency.

Last week, the central bank also issued a caution against betting on a weaker yuan and unveiled steps to strengthen it, such as decreasing the amount of foreign exchange reserves required of banks.

Early in September, the yuan-to-dollar exchange rate fell to a 16-year low, although it has since increased. 

source: ft.com