January 31, 2018 / 7:56 AM / 24 days ago

China's PBOC says counter-cyclical adjustment on cross-border yuan financing to curb 'herd' effect

BEIJING, Jan 31 (Reuters) - China’s central bank said on Wednesday its counter-cyclical adjustment on cross-border yuan account financing is aimed at helping curb “herd” effects in markets and improving the country’s financial supervision.

The People’s Bank of China said earlier this month that Chinese commercial banks’ upper limit on yuan cross-border financing will be determined by their outstanding deposits and a counter-cyclical factor, which was 3 percent currently.

The coefficient on counter-cyclical adjustment on cross-border yuan account financing at 3 percent has been in place since July 2013, the PBOC said in a statement sent to Reuters in response to queries on how the adjustment is set. (Reporting by Beijing Monitoring Desk; Editing by Sam Holmes)

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