China eyes market forces to drive FX reform

China is set to use swelling offshore holdings of its tightly-managed currency worth around 1 trillion yuan (HK$1.23 trillion) to justify a landmark shift in tactics to relax capital controls.

The shift means the People’s Bank of China (PBOC) will abandon a time-table approach to liberalising capital controls, favouring instead a series of reforms tied to soaring foreign demand for yuan to give more freedom to invest offshore currency deposits on the mainland.

via Business feed http://www.scmp.com/business/economy/article/1175523/china-eyes-market-forces-drive-fx-reform