China's foreign exchange regulator issued new rules on Friday relaxing restrictions on multinational companies' management of their foreign currency-denominated debt in China, allowing them to pool debt from all their subsidiaries for central management.
The rules, which take effect immediately on a trial basis, permit these companies to use the local currency yuan liquidity derived from their sales of foreign currency debt to pay back yuan loans and conduct equity investment, the State Administration of Foreign Exchange said in a statement on its website.
The rules come after Reuters reported that the central bank was tightening regulations on trade in yuan derivatives, in efforts to curb speculation and volatility after a shock devaluation of the yuan last month.
Analysts see the moves as relieving downward pressure on the yuan by encouraging companies to sell off their foreign currency.
The rules, which take effect immediately on a trial basis, permit these companies to use the local currency yuan liquidity derived from their sales of foreign currency debt to pay back yuan loans and conduct equity investment, the State Administration of Foreign Exchange said in a statement on its website.
The rules come after Reuters reported that the central bank was tightening regulations on trade in yuan derivatives, in efforts to curb speculation and volatility after a shock devaluation of the yuan last month.
Analysts see the moves as relieving downward pressure on the yuan by encouraging companies to sell off their foreign currency.