The sustained drop in the currency—it has been falling against the dollar almost continuously since the beginning of 2014—has led to large outbound transfers of cash. Last year, there was perhaps as much as a trillion dollars of net capital outflow. It appears that outbound transfers, legal and surreptitious, picked up as the year progressed. As Paul Gruenwald of S&P Global told Bloomberg, there are three options to stem capital outflow: impose capital controls, use forex reserves to defend the currency, or allow currency depreciation. The South China Morning Post reports that the New York branch of the Industrial and Commercial Bank of China has already blocked two payments because of the new rule.

Source: Forbes December 05, 2016 03:49 UTC