Standard Chartered said to be suspended from trading currency in China

Standard Chartered has been temporarily banned from some foreign-exchange trading in China.
Standard Chartered has been temporarily banned from some foreign-exchange trading in China.PHOTO: REUTERS

LONDON (BLOOMBERG) - Standard Chartered Plc has been suspended from some foreign-exchange trading in China until the end of March as part of the government's measures to to stem a market selloff, according to a person with knowledge of the decision.

Standard Chartered is one of three banks that were temporarily banned from currency trading in December and the lender has appealed to China's central bank to shorten the hiatus, said the person, who asked not to be identified because they're not authorized to speak about the matter publicly. China's decision to suspend Standard Chartered was reported earlier by Reuters, which also cited Deutsche Bank AG among lenders banned.

China is trying to prop up a weakening economy and curtail a stock selloff that erased US$590 billion (S$840 billion) of value on Monday in what was the worst-ever start to a year for the nation's equity market.

On Wednesday the yuan sank to a five-year low after the People's Bank of China again weakened the currency, following a similar intervention in August, which sparked a rout in emerging-market currencies and stocks.

A three-month ban on settling offshore clients' yuan transactions in the onshore market was imposed last month by the People's Bank of China, people familiar have said. The clampdown came as the growing offshore-onshore spread made it profitable to buy the currency in Hong Kong and sell it in Shanghai.

Officials at Standard Chartered and Deutsche Bank declined to comment.