The Chinese central bank has issued a regulation on the management of foreign exchange agencies, which will take effect on November 1.

The regulation only allows foreign exchange agencies to change the convertible foreign currencies in cash or travel notes to Renminbi, but forbids foreign exchange purchase with Renminbi, said an official with the People's Bank of China (PBOC).

Domestic residents and Chinese nationals living abroad on Chinese passport should buy foreign exchange they need from the concerned banks with Renminbi when heading abroad.
 
Non-domestic residents, foreigners or residents from Hong Kong, Macao and Taiwan, should go to the banks specified by the foreign exchange agency if they want to change the Renminbi they got from the foreign exchange agency back to foreign currency. The amount of exchange should be no higher than the original foreign exchange and the business should be performed within six months after the last foreign exchange transaction.

Foreign exchange agencies refer to those domestic corporations authorized by the qualified domestic banks to have foreign exchange business by contract.

According to the regulation, all corporations registered in China could apply to banks with foreign exchange business for authorization of the business and concerned banks could authorize any domestic corporations the rights to start this business.

Those foreign exchange agencies set up before the regulation should make up the application procedure within two months after the regulation takes effect, said the PBOC official. If they fail to make up the application, they will not be allowed to have the foreign exchange business again.

The regulation aimed to better satisfy the requirements of domestic residents and non-domestic residents in foreign exchange while keeping good order in China's foreign exchange market, said the PBOC official.

(Xinhua News Agency October 19, 2003)