Photo: iStock
In China as in the rest of the world, the drivers of inflation are complex. Photo: iStock

China’s central bank Shanghai headquarters has stepped up to rein in the use of arbitrage funds to bet against the yuan currency, The Paper reported.

On Thursday, the central bank suspended the implementation of the three net outflow formulas of the Free Trade Accounting Unit.

In addition, commercial banks are not allowed to deposit or lend RMB funds abroad through inter-bank current accounts.

“This policy is to reduce the amount of overseas yuan circulation and curb arbitrage funds from shorting the yuan,” said an insider from the International Business Department of the state-owned bank.

However, actual cross-border capital collection and payment of the real economy won’t be affected, the insider added.