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November 24, 2016

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Home » Business » Finance

Plan to lure funds via FTZ accounts

By Leng Cheng | November 24, 2016, Thursday | Print Edition

SHANGHAI will strive to draw capital to accounts held in the city’s pilot free trade zone, and encourage more professionals and companies to convert foreign currencies to yuan, the central bank said yesterday.

Zhang Xin, deputy head of the Shanghai headquarters of the People’s Bank of China, said the city aims to achieve a net capital inflow in 2016 via FTZ accounts and balance capital inflows and outflows to stabilize the financial market.

The yuan’s depreciation trend prompted the market to be concerned over worsening capital outflow as the currency lost over 3 percent of its value against the US dollar since the end of September.

In order to lure inflows and stem market fears that financial reforms may slow, Shanghai will provide easier access to foreign exchange swaps in the FTZ, especially in innovation and cross-border investment, the central bank said in a document released at a news conference yesterday.

Banks will offer more attractive deals to yuan buyers within the FTZ, said Zhou Hehua, vice president of Bank of China’s Shanghai branch.

“We will provide better terms to foreign exchange sales, regarding preferential policies,” Zhou said.

Other measures include allowing an extended list of foreign and domestic talent and locally registered innovative firms to have FTZ accounts. Once set up, individual and corporate account holders can access incentives provided by Chinese lenders.

Multinational firms can set up onshore cross-border yuan capital pools using FTZ accounts to manage yuan holdings globally, the document said.

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