Domestic funds get an extra US$3.3b quota for offshore investment

China's foreign exchange regulator granted fresh quotas under its outbound QDII scheme for the first time since April 2019, official data showed, Reuters reports.

The US$3.36 billion worth of quotas was granted to 18 institutions under the Qualified Domestic Institutional Investor (QDII) scheme, which channels domestic money into offshore financial markets, data from the foreign exchange regulator showed late Wednesday.

The move by the State Administration of Foreign Exchange comes as the yuan has strengthened against the dollar over the past weeks amid accelerating foreign money inflows.

The Chinese currency could trend higher over a period of time, so China can appropriately loosen its grip on outbound flows and guide overseas asset allocation by domestic institutions in an orderly manner, the official Securities Journal reported today.

China's total QDII quota stood at US$107.34 billion as of September 23, compared with US$103.98 billion the previous month.