Small Exchange: China stabilises, Trinidad and Tobago impose limits and Qatar’s forex slips

Peter Terlato 7 November 2017

foreign cash large

China's foreign exchange is holding steady, Trinidad and Tobago banks limit international currency withdrawals and Qatar's forex sinks.

Shanghai Stock Exchange boss says China's forex is stable

In an exclusive interview with Xinhua News Agency Shanghai Stock Exchange (SSE) chairman We Qing said China's foreign exchange reserves were holding steady, developing at a healthy and reasonable level.

Qing said favourable economic conditions make this an ideal time to open China's capital market to the world.

In recent years, China has been increasingly attracting foreign investors in the domestic financial market.

The report said sales of yuan-denominated debt (panda bonds), sold in China by foreign firms, have raised nearly 90 billion yuan (around US$13.6 billion) on the SSE, accounting for nearly half of the total issuance.

The People's Bank of China found panda bonds issuance had reached 194 billion yuan (US$29.2 billion) by July.

Forex limit imposed in Trinidad and Tobago

Two of Trinidad and Tobago's financial institutions have established new limits on access to foreign exchange.

Late last month, T&T Unit Trust Corporation (UTC) introduced daily and monthly disbursement limits on its TT-dollar Income Fund Visa Electron card, after reporting it had "limited access" to foreign exchange funds.

The limit for daily international ATM transactions was reduced to TT$1,000 (around US$147). Daily international Point of Sale (POS) transactions were reduced to TT$5,000 (around US$735), while a monthly limit of TT$20,000 (around US$2,940) was imposed.

JMMB Bank enforced forex restrictions on purchases and withdrawals of all foreign currencies, not only US dollars. A foreign currency limit equivalent to TT$3,500 (around US$523) per month was sanctioned.

While customers can't access foreign currency cash via ATMs, local dollar limits have not been impacted.

Qatar's foreign exchange reserves slip

Qatar National Bank's foreign exchange reserves fell 25% year-on-year in September, down to US$35.6 billion.

In a post published on the bank's website, the bank reported its forex reserves included up to US$19.06 billion in foreign currency cash, US$9.9 billion in deposits, US$1.2 billion in gold, US$4.9 billion in treasury bills and bond investments and a further US$386 million worth of special drawing right (SDR) deposits.

Qatar has been involved in a diplomatic crisis with the Arab Quartet – Egypt, the United Arab Emirates, Saudi Arabia and Bahrain – since June this year, when the four countries began imposing an economic boycott.

The boycott was a response to the Quartet's accusations of Qatar's connections to terrorist organisations.

Some Qatari banks have become less inclined to sell dollars to foreign lenders during the diplomatic crisis.

However, Qatar National Bank is reportedly still providing dollars to local lenders to meet domestic business needs at the pegged rate of 3.64 riyals per dollar, according to a report published by Bloomberg last month.

Each week Small Exchange sums up currency news from around the globe and looks into how it impacts exchange rates and options.

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