Exclusive: China has severely restricted imports of gold since May, according to sources, in a move that could be aimed at curbing outflows of dollars and bolstering the yuan as economic growth slows
LONDON/BEIJING - China has severely restricted imports of gold since May, bullion industry sources with direct knowledge of the matter told Reuters, in a move that could be aimed at curbing outflows of dollars and bolstering its yuan currency as economic growth slows.
The restrictions come as an escalating trade confrontation with the United States has dragged China’s pace of growth to the slowest in nearly three decades and pressured the yuan to its lowest since 2008. Chinese customs figures show it imported 575 tonnes of gold in the first half of the year, down from 883 tonnes in the same period of 2018.
But quotas have been curtailed or not granted at all for several months, seven sources in the bullion industry in London, Hong Kong, Singapore and China said. It has also restricted gold import quotas before - most recently in 2016 after the yuan weakened sharply, bullion bankers said.“Gold going in is money going out,” said one of the people, adding that Chinese buyers tend buy dollars to pay for metal. “It’s all linked to what’s going on in terms of how the central bank is handling the currency,” the person said.
But restricting gold imports is an easy way to curtail outflows without affecting people’s lives, bullion bankers said.A sharp rise in prices has prompted many in China to cash in their gold for profit, boosting local supply, while resurgent demand elsewhere in the world has been strong enough to soak up extra metal.
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