Surge in illegal forex funds seized
By Feng Jianmin |
April 25, 2012, Wednesday
|
Print Edition
Print Edition
CHINA more than doubled the funds it confiscated from illegal foreign exchange trading last year compared with 2010, as it continued to crack down on speculative capital betting on China's economic growth and financial markets, its top currency regulator said yesterday.
The regulator confiscated 503 million yuan (US$79.4 million) of illegal funds last year, up from 243 million yuan in 2010, the State Administration of Foreign Exchange said in a statement.
More than 15,000 cases of foreign exchange irregularities had been found from 2007 to 2011, with 1.27 billion yuan in illegal funds seized, SAFE said.
Speculative capital, or "hot money" that seeks quick profits, has been sneaking into China illegally through the underground money market, and due to irregularities in trading and investment settlement.
SAFE reiterated that it would step up measures to crack down on "abnormal" cross-border capital flow this year, and would facilitate legal cross-border payments to prevent irregularities amid expectations of a continuous inflow of hot money.
The statement did not specify measures to be taken, but a bank official told Shanghai Daily that a new system may soon be launched to more efficiently track the use of funds converted from foreign currencies.
The system cannot detect the hot money by itself, but will facilitate efforts of different regulatory bodies to check the flow of foreign capital, he said.
A Shanghai-based foreign exchange trader said it is difficult to ban speculative investors as controlling rules will make them more careful.
He said SAFE should add more rules and transparency to guide foreign funds in China's capital market, which could also legitimize tax income.
Also yesterday, central bank data showed that financial institutions in China were buying more foreign exchange in March than in February, the third monthly increase in a row.
The regulator confiscated 503 million yuan (US$79.4 million) of illegal funds last year, up from 243 million yuan in 2010, the State Administration of Foreign Exchange said in a statement.
More than 15,000 cases of foreign exchange irregularities had been found from 2007 to 2011, with 1.27 billion yuan in illegal funds seized, SAFE said.
Speculative capital, or "hot money" that seeks quick profits, has been sneaking into China illegally through the underground money market, and due to irregularities in trading and investment settlement.
SAFE reiterated that it would step up measures to crack down on "abnormal" cross-border capital flow this year, and would facilitate legal cross-border payments to prevent irregularities amid expectations of a continuous inflow of hot money.
The statement did not specify measures to be taken, but a bank official told Shanghai Daily that a new system may soon be launched to more efficiently track the use of funds converted from foreign currencies.
The system cannot detect the hot money by itself, but will facilitate efforts of different regulatory bodies to check the flow of foreign capital, he said.
A Shanghai-based foreign exchange trader said it is difficult to ban speculative investors as controlling rules will make them more careful.
He said SAFE should add more rules and transparency to guide foreign funds in China's capital market, which could also legitimize tax income.
Also yesterday, central bank data showed that financial institutions in China were buying more foreign exchange in March than in February, the third monthly increase in a row.
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