The People's Bank of China will mandate a deposit of 20 percent of sales to be held at zero interest and frozen for a year
- Effective October 15
- Aimed at preventing macro financial risks, and a step toward preventing capital outflows by increasing the cost of speculation in the forwards market
Andy Ji, a Singapore-based currency strategist at Commonwealth Bank of Australia
- "The PBOC hopes to limit the selling of yuan forwards on persistent depreciation expectations
- "But the depreciation pressures will remain as the real economy continues to slow"
Sue Trinh, a senior currency strategist at Royal Bank of Canada in Hong Kong
- "My first impression is that this may drive a slight technical convergence in the onshore and offshore yuan curve from current levels
- "I am not sure more restrictions bring us closer toward financial market reform."
