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China’s ICBC to restrict some forex and commodities trading By Reuters

© Reuters. FILE PHOTO – The entrance of the branch of Industrial and Commercial Bank of China in Beijing (China) April 1, 2019 is depicted with its logo. REUTERS/Florence L/File Photograph

SHANGHAI, (Reuters) – The Industrial and Commercial Bank of China announced Friday that it would restrict some retail business activities that involve foreign exchange and commodity trading.

China’s most important bank made the move, along with other regulators taking measures to curb financial risks. They include banning cryptocurrency transactions, limiting property speculation and dampening rises in commodity prices.

These restrictions come at a time when global energy prices are on the rise due to shortages in China, and other countries.

ICBC announced in a statement it will stop opening new accounts for “account Forex business” starting October 17. Individuals can trade against the Yuan to hedge or speculate, but they cannot withdraw the currency from their trading accounts.

Existing clients won’t be able to open new trading accounts starting on Nov 14.

ICBC also stated that it will no longer accept new clients in the same trading business as ICBC, which involves energy, base metals and precious metals.

The bank stated that “risk is high” in the global commodities and forex markets. Therefore, it was important to control risks.

ICBC, China Merchants Bank, and Bank of China have closed all foreign exchange trading companies that allowed clients to bet on currency pairs other than the Yuan.

Reuters reports that Chinese authorities have tightened control over China’s currency markets, as reported by Reuters last month.

In the past, Chinese banks were burned by high-risk investment products. After the fall in oil prices, Bank of China suffered losses last year from a crude-oil-linked product.

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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.