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The Industrial and Commercial Bank of China (ICBC) said on Friday that it will prohibit certain types of retail enterprises that deal in foreign currency and commodities.
The decision by China’s largest bank comes as officials take a variety of steps to reduce financial risks, including moderating commodities price hikes, prohibiting cryptocurrency trades, and limiting property speculation.
The bank’s limits come at a time when global energy prices have risen as a result of power shortages in China and other regions of the world. In a statement, ICBC stated that beginning October 17, it will prohibit new account openings for so-called “account forex business.” Individuals can trade forex against the yuan for speculative or hedging purposes under this business, but they cannot remove or transfer the foreign currencies from their trading accounts.
Existing clients will be prevented from opening new trading positions from November 14. ICBC will also stop accepting new clients in a similar trading industry involving energy, base metals, agricultural products, and precious metal indexes on October 17, according to an ICBC statement.
“Risk is high these days in global forex and commodities markets, so please pay attention to controlling risks,” the
bank said. ICBC and other banks, notably Bank of China and China Merchants Bank, have discontinued foreign exchange trading businesses that allowed individual consumers to gamble on non-yuan currency pairs in recent months.
Chinese regulators have tightened their grip on the country’s currency market. In the past, Chinese banks have been burned
by dangerous investment products. Clients of Bank of China faced losses in a crude oil-linked product last year when oil prices fell.
Story By: Norvisi Mawunyegah