Beijing continues to keep the lid tight on outbound capital flows
Country’s foreign exchange regulator has not increased QDII quota for last 15 months
China’s State Administration of Foreign Exchange continued to keep a tight leash on the country’s outbound investment schemes by not releasing any fresh quota as it continued to take more steps to stem capital outflows after foreign exchange reserves dropped to a new low.
Contrary to expectations the SAFE decided not relax the threshold for the Qualified Domestic Institutional Investors scheme, which allows mainland institutions such as mutual funds to raise capital from local investors in yuan before converting them into foreign currencies for purchasing overseas equities and bonds.
The outstanding investment quota under the QDII scheme stood at US$89.99 billion by the end of February, according to data published on the SAFE website on Monday.
The quota for QFII, or Qualified Foreign Institutional Investor, which allows foreign funds to trade mainland equities and bonds, on the other hand was expanded to US$1.9 billion in February from US$89.2 billion.
The quota for RQFII, which allows foreign funds to undertake equities and bond trading with yuan, was increased by 11.5 billion yuan to 541.1 billion yuan (US$787.5 million).