For the first time in almost two years, the Chinese authorities have slightly weakened control over the outflow of the yuan, reflecting Beijing's greater confidence in the value of its currency and easing the risks of capital outflow from the country.
The People's Bank of China in January this year required commercial banks to stop processing cross-border yuan payments unless the banks could provide an equal amount of inflow and outflow yuan by the end of each month. This rule was canceled from last Wednesday.
Now banks can freely conduct cross-border yuan payments and accept requests for money transfers from their corporate and individual customers. It is expected that this step will help to increase liquidity in the offshore renminbi markets, especially Hong Kong.