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China allows foreign institutions to open RMB accounts

The People’s Bank of China end of September released regulations to allow foreign institutions to open cross-border RMB-settlement accounts at locally registered banks from Oct. 1, which will further expand its ongoing RMB-settlement trial program.

According to the rules published on the central bank’s website, an overseas institution can choose either a domestic bank or a local unit of a foreign bank to open an RMB-settlement account.

However, the PBOC posted some restrictions on such accounts. For example, the RMB in these accounts are not allowed to be converted into foreign currencies or withdrawn in cash.

The central bank said the rules do not apply to RMB-settlement accounts opened by foreign central banks, interbank settlement accounts set up by foreign banks, special RMB accounts opened by qualified foreign institutional investors for trading securities in China, or special accounts for investing in China’s interbank bond markets.

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