Investment Policy News
- Residents may directly invest overseas
Date: 9-Mar-2007 Sources: (Shenzhen Daily)
THE government might give individuals more options for sending money abroad directly instead of through approved investment institutions, top foreign-currency regulator Hu Xiaolian said Thursday.
The fledgling Qualified Domestic Institutional Investor (QDII) program, launched last April to spur capital outflows and so temper upward pressure on the yuan, permits selected institutions to channel client money abroad, mainly into fixed income and money market assets.
But yields have not been attractive enough to lure mainland investors and only a fraction of the US$14 billion in QDII quotas has been used.
'The current problem with the QDII program is not the quota but some restrictions on the design of products. Some say that individuals want to have the opportunity to invest overseas directly, not through an agent.
'I think this is not a bad idea and we will consider this,'Hu, director of State Administration of Foreign Exchange (SAFE), said.
The government Feb. 1 raised the amount that residents may freely convert into foreign exchange to US$50,000 each year from US$20,000.
'This year, building on that, we might further consider expanding their investment channels,'Hu said.
She said QDII rules themselves might be loosened. Analysts have been predicting that the government will let more money flow into equities.
Bank of China last month closed one of its QDII funds after just five months because a steady rise in the yuan had eroded returns expressed in U.S. dollars.
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