The State Administration of Foreign Exchange (SAFE), China's top foreign-exchange regulator, said in a Sina Weibo post on Monday night that the launch of a new system for banks' selling or buying foreign currencies to or from individuals doesn't mean a change in current foreign-exchange regulations, and this will also not affect individuals' foreign-currency purchases or sales.This announcement came after rumors spread that the new system caused a big fall in Chinese shares on Monday.
On Monday, China's B-shares, or foreign-currency denominated shares, plunged by 7.9 percent, while the benchmark Shanghai Composite Index fell by 2.59 percent. The SAFE said the launch of the new system had nothing to do with the turmoil in onshore capital market.
Earlier in May, the SAFE had already announced that it would discontinue current foreign-exchange transaction system and launch a new system in January 1, 2016. The new system is designed to make it easier for banks to process foreign-exchange transactions, as well as to improve effective monitoring of individuals' foreign currency deals.
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