Tuesday, November 17, 2009

Forex laws to limit China

Forex laws to limit China B share rush

China will soon begin trading hard currency B shares, but only under tight controls aimed at curbing illegal money trading.

State-owned media said Thursday a suite of foreign exchange controls -- designed to avert a stampede to buy illegal hard currency for B share trading -- would remain in place until June.

The announcement of the controls follows China's statement that Chinese investors would for the first time be allowed to trade hard currency China B shares, which were previously tradable only by international investors.

The China B share market, which is much smaller than the China A share market, will re-open on Monday after a week long suspension designed to allow for the China A and China B exchanges to prepare for a new wave of traders..

The foreign exchange controls state that until June 1, Chinese investors may only use foreign exchange savings deposited before February 19, the Shanghai Securities News quoted a joint statement by stock market and foreign exchange regulators as saying.

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