PBOC plans to tighten currency trading rules

FXStreet (Mumbai) - According to a People's Bank of China (PBOC) document published on Wednesday, China's central bank plans to tighten rules on trading of currency forwards from October, in a move to curb speculation and volatility after a shock devaluation of the currency last month, PBOC sources told Reuters.

The PBOC said that its planned foreign exchange purchase reserves expected to be implemented in October will include all derivative products.

Reserve ratios would be set at 20% of the nominal value of forwards and swap contracts and 50% of the nominal value of principal for options.