China Tries to Stem Yuan Outflows, But Can't Turn Off CNH Signal

Reuters: China suspends forex business for some foreign banks: sources
China's central bank has suspended at least three foreign banks from conducting some foreign exchange business until the end of March, three sources who had seen the suspension notices told Reuters on Wednesday.

Included among the suspended services are liquidation of spot positions for clients and some other activities related to cross-border, onshore and offshore businesses, the sources said.

The sources, speaking on condition that the banks were not named, said the notices sent to the affected foreign banks by the People's Bank of China (PBOC) gave no reason for the suspension.

If you haven't already read The Informational Power of the Offshore Yuan Exchange Rate, check it out. More than the gap between CNH and CNY signaling outflows, the price of CNH is valued as a market price within China, where CNY is still seen as heavily controlled by the central bank.

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