China Works to Slow Capital Flight

In another attempt to stem the tide of cash escaping from its borders, the People’s Bank of China changed bank reporting requirements on Friday to cover all domestic and overseas transactions larger than 50,000 Yuan ($7,201). According to PBOC Chief Economist Ma Jun the obligation of reporting transactions larger than CNY 50,000 will be assumed by financial institutions.

He stated that here will be no official approval procedures and no extra documentation required for individuals or companies. Ma Jun pointed to other major economies that have similar rules. However, China is preserving the same quota of 50,000 yuan for each individual's annual foreign exchange purchase.

The latest move was aimed to better monitor financing for terrorism and money laundering and not aimed at normal business activities. Nevertheless, new rules are likely to impact smaller Chinese businesses and individuals considering yuan-sellers at the highest volume are average Chinese citizens.

After the largest annual gain since 2009, oil advanced as output cuts by Kuwait signaled OPEC and other producing nations are beginning to taper oil production in an attempt to stabilize the market.

OPEC member Kuwait has slashed output by 130,000 barrels a day to roughly 2.75 million a day, according to Kuwait Oil Co. Chief Executive Officer, Jamal Jaafer. Meanwhile, the US added active rigs for a ninth week in a row, boosting the number of rigs to the highest in almost a year.

Oil rose for the first time in three years in 2016 as the OPEC and eleven nations from outside the group decided to reduce swollen global inventories with an output cut plan that was effective on Jan. 1^st. Crude stockpiles remain at the highest seasonal level in more than three decades in the US – the world’s biggest oil consumer.