• PBOC orders a three-day suspension of domestic renminbi transfers
  • Also a suspension, spanning nine calendar days, of conversions of renminbi to foreign currency
  • The specific reason given—“system maintenance” at the central bank

More here (ADDED IN: As of 0530GMT 27JAN2014 Forbes has removed the article)

Says Forbes:

  • what’s really going on? This crunch follows similar incidents in June and December of last year. In June, for instance, the central bank used the excuse of a “system upgrade” to allow banks to shut down their ATMs and online banking platforms. As a result, they conserved cash and thereby avoided a nationwide meltdown. So today’s “system maintenance” notice is a sign of a fundamental problem. Banks, in short, need cash to rollover ever-increasing amounts of nonperforming loans and wealth management products. This month, cash needs are even higher than normal because of the impending default of the Credit Equals Gold wealth product scheduled for January 31.
  • Perhaps more important, the Federal Open Market Committee is holding its next meeting on January 28-29 so there could be an announcement on the 29th on the trimming of bond purchases. The suspension of FX transactions means that speculators will not be able to dump renminbi and buy dollars. Fed Chair Bernanke’s words on tapering, beginning in May of last year, shook emerging markets. A FOMC announcement this time could undermine China, especially because of the darkening perceptions about that country.

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Forbes is seeing the worst case scenario and seem a little over the top indeed. Note: “In June, for instance, the central bank used the excuse of a “system upgrade” to allow banks to shut down their ATMs and online banking platforms”. Yep, its happened before and … we are all still here. Is it a “a sign of a fundamental problem”? Yes, it is. and the PBOC is in the process of trying to address these problems. Its not a quick fix.

But, nevertheless, a concern and something to be aware of.

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ADDED: There is further clarification, here.

ADDED MORE: No, There Is No Stoppage Of Cash Transfers In China