China Has No Current Plans to Announce Full Convertibility of Yuan Under Capital Account

        BEIJING--China has no immediate plans to announce making the yuan fully convertible under the capital account, a senior Chinese foreign-exchange regulator said Wednesday.
        "Capital account opening will be a gradual process," Wang Yungui, a director of the State Administration of Foreign Exchange, said at a briefing.
        When asked if China has any plans to announce full convertibility, Mr. Wang said there is no such plan now.
        Yuan convertibility would allow freer cross-border fund flows for financial transactions. Currently, the yuan is convertible under the current account, which covers trade, but there are still some restrictions on the capital account, which measures investment.
        In recent months Beijing has taken steps to open up its capital account by introducing Shanghai-Hong Kong stock link that gives Hong Kong investors access to the domestic stock market and working to increase foreigners' access to Chinese investments and Chinese access to those abroad.
        In its latest report on the Chinese currency, the central bank said it would soon launch a trial to let domestic retail investors invest overseas directly instead of through financial institutions, another key move to open the nation's capital account.
        Earlier this year, People's Bank of China Gov. Zhou Xiaochuan said China would try to free up interest rates and the flow of capital across the border by the end of the year.
        Mr. Wang also said at Wednesday's briefing that Chinese authorities will work closely with the International Monetary Fund in evaluating the yuan's possible inclusion in the fund's special reserve asset, known as the Special Drawing Rights.
        Beijing views the yuan's inclusion in the IMF's reserve currency, which includes the yen, euro, U.S. dollar and pound sterling, as an opportunity to promote the yuan's role as a currency for international trade and investment. That push may accelerate China's financial reforms, economists have said.
        At the same briefing, Mr. Wang said the central bank and the regulator are working to cut red tape in current foreign-exchange regulations, strengthen data collection and step up supervision of cross-border capital flows and foreign debts. China saw a net inflow in foreign exchange capital in the first five months of the year, he said.
        Write to Grace Zhu at grace.zhu@wsj.com
        (END) Dow Jones Newswires

        June 17, 2015 00:09 ET (04:09 GMT)

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