China to curb yuan speculation

BEIJING: China is studying plans to curb currency speculation even as it seeks to quicken the process of making the yuan trade freely, a deputy central bank governor said.
Beijing will further open up its capital markets and develop its foreign exchange market as it aims to "accelerate the renminbi convertibility on the capital account", Yi Gang wrote in an article published in China Finance magazine, a central bank publication. The yuan is also known as renminbi.
While the yuan is already convertible under China’s current account, the broadest measure of trade in goods and services, the capital account, which covers portfolio investment and borrowing, is still subject to restrictions due to worries about abrupt capital flight and hot money inflows.
Chinese officials have not given a firm timetable for making the yuan freely tradeable.
They have pledged financial reforms to make the yuan more convertible as they push for it be included in the International Monetary Fund’s Special Drawing Rights (SDRs) basket.
But the authorities are also studying plans to curb currency speculation, including a "Tobin tax", non-interest bearing reserve requirement and foreign exchange trading fees, Yi said. —Reuters