SHANGHAI, China (AP) - China will end foreign exchange quotas for overseas investments by local companies in its latest move to ease controls on currency dealings, the government said Thursday.
Effective July 1, the quotas will cease to exist, the State Administration of Foreign Exchange said in a statement on its Web site.
China also recently increased the amount of foreign currency companies and individuals can take abroad, another incremental step toward making the tightly controlled Chinese yuan a freely convertible currency.
SAFE said local companies can use their own foreign currency, borrow foreign exchange from banks, or exchange their yuan into foreign currencies to finance overseas investments. They can also pay fees worth up to 15 percent of total investment value for overseas projects before receiving formal regulatory approval, it said.
China currently limits total overseas investments of domestic companies to $5 billion a year.
The currency regulator said it will increase monitoring of foreign-exchange transactions to prevent abuse of the new policy.