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China Freezes Outbound Investment Quotas as Outflows Hurt Yuan

  • SAFE hasn't granted any new QDII quotas for five months
  • Offshore yuan trades 1.8% weaker than currency onshore
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China refrained from granting new quotas for residents to invest in overseas markets for a fifth month in August, the longest halt in six years, as authorities seek to stem weakness in the yuan.

The State Administration of Foreign Exchange, which has approved 132 local institutions to put as much as $89.99 billion in offshore assets via its Qualified Domestic Institutional Investor program, hasn’t granted new allocations since March. Quotas for overseas investors to access domestic capital markets rose $16.4 billion to $140.3 billion in the period, data from the regulator show. The yuan traded 1.8 percent weaker outside of China than inside the country on Monday, indicating depreciation pressure.