Banks are forced to cover tracks of China's FX regulator
China's forex regulator is ordering banks to keep its instructions as for curbing capital outflows secret and to ensure that research experts conceal any negative views about the Yuan's prospects.
Both demands are seen as an attempt by the country’s government to avert alarm, which could potentially trigger further drops in the national currency, as the bankers from local as well as foreign banks told.
The Yuan lost more than 6% against the greenback the previous year and it’s currently at eight-year minimums, thus prompting a bunch of restrictive measures on capital outflows from the State Administration of Foreign Exchange, including setting limits on banks' currency volumes in some Chinese cities or provinces and requiring official approval for smaller transactions.
SAFE, which appears to be a part of the People's Bank of China, is actually insisting in oral instructions to dozens of financial institutions that they don't disclose its role in such restrictions. By the way, six Chinese bankers have already told that the measures are spoiling their relationships with clients because they aren’t able to explain why they had to turn away business.