Small Exchange: Illegal separatist funding in India, China plays it SAFE and Britain’s volatility

Peter Terlato 5 June 2017 NEWS

money international

This week's currency news rounded up.

Separatist leader sought for illegal forex funding

India's Enforcement Directorate (ED), tasked with fighting economic crime, has summoned Separatist leader Shabir Shah for questioning, under the country's Foreign Exchange and Management Act (FEMA).

India Today reports Shah must turn himself in by June 6, otherwise an arrest warrant will be issued.

Shah is accused of receiving tens of millions of rupees, by way of hawala.

In recent weeks, India's National Investigation Agency (NIA) has been examining methods of funding of separatist leaders and the use of these funds in inciting unrest in the Kashmir Valley.

Chinese banks to monitor overseas withdrawals

In a statement released Friday, China's State Administration of Foreign Exchange (SAFE) declared banks will be required to provide daily reports of cardholders' international withdrawals from 1 September, as well as any bank transactions exceeding 1,000 yuan (US$146.70).

Previously, banks only measured the total amount of foreign transactions made by domestic cardholders.

"With increasing requirements to fight money laundering, terrorist financing and tax avoidance, measures for cross-border transactions need to be enhanced in terms of trading transparency and quality of statistics," the SAFE said.

SAFE said the new rules would not alter China's foreign exchange management policy and only serve to protect and support the use of bank cards for foreign transactions.

British election causing currency volatility

If Britain's Labour Party continues to narrow the gap in the upcoming snap election then further volatility in sterling is likely, according to the Telegraph's Financial Services.

Britain's currency jumped to US$1.29 against the dollar in April after Prime Minister Theresa May announced there would be an election held in June. The pound has remained strong through May, however, the latest polls show a push against the Conservatives, towards Labour.

Further tightening of the gap is expected to cause instability for the pound against the dollar and euro.

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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