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Forex control loosened on domestic companies

www.chinanews.cn 2005-08-03 14:09:01

Chinanews, Beijing, Aug. 2 (By Wei Xi) - The State Administration of
Foreign Exchange (SAFE) announced today that it would raise the upper
limit of current forex accounts of domestic organizations. This would be
the eighth adjustment of China's policy on forex income retainment for
domestic organizations since 1994.
This adjustment further liberates utilization of current forex accounts
of domestic organizations. Today, SAFE released a notice on relevant
issues of loosening control on forex income in current accounts of
domestic organizations, which says that it would raise the proportion of
forex retainment of domestic organizations from between 30% and 50% at
present to between 50% and 80%.
During the previous adjustment in May 2004, SAFE had raised the limit
from 20% to between 30% and 50%.
Relevant officials believe that this adjustment will help reduce the cost
of forex settlement and sharpen competitive edges of domestic enterprises
in the international market. It should not be overlooked that this
adjustment enables domestic organizations to retain forex income in a
looser environment and further promotes the reform of China's forex
settlement mechanism.
In the meantime, corporate forex settlement better reflects the demand of
the market. This will further rationalize the supply and demand in the
forex market and improve the RMB exchange rate mechanism.

          ��Watchdog to loosen forex restrictions (2005-07-22)
          ��China's forex reserves likely to rank first (2005-07-15)
          ��China does not want large forex rises (2005-06-03)
          ��China loosens forex control for investment abroad (2005-05-23)

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