China's foreign exchange regulator said on Thursday it will step up checks on individuals' foreign currency buying, in its latest step to curb capital outflows. The State Administration of Foreign Exchange (SAFE) will launch a new system to monitor foreign exchange businesses at banks from the start of 2016 to prevent people from evading the official limits on currency buying, it said in a statement. Individuals are now permitted to buy a maximum equivalent of $50,000 of foreign currency per year.
People found trying to purchase more than official limits will be added to a "watchlist" managed by SAFE, according to the statement, as China cracks down on illegal money outflows and capital flight. Chinese authorities have started to police the nation's foreign exchange market in a way currency traders have rarely seen before, levying penalty payments for aggressive trading and prompting some banks to turn down business. Reuters reported on Wednesday that China's central bank had suspended at least three foreign banks from conducting some of their foreign exchange business until the end of March.