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Industrial and Commercial Bank will stop opening accounts for business in the Forex market. The Industrial and Commercial Bank of China, ICBC, announced last Friday that it will restrict services to some retailers operating in the foreign exchange (Forex) and commodity sectors.
The largest bank in China took these measures after regulators tried to limit financial risks in the retail sector: they banned cryptocurrency transactions, limited speculation in the real estate market and curbed the rise in commodity prices.
The bank’s restrictions also stem from soaring global energy prices and power shortages in China and some other parts of the world, Reuters reported.
ICBC said in a statement that starting October 17, the bank will stop opening accounts for Forex businesses. This refers primarily to companies that allow individuals to speculate against the yuan or buy them for hedging purposes. However, you cannot withdraw foreign currency from a trading account. Starting from November 14, the existing clients of the bank will not be able to open new trading positions.
Tough Stance on Financial Assets
ICBC will also stop accepting new clients offering similar trading services in the energy market, industrial and precious metals, agricultural products, and commodity indices. The ban will take effect October 17, the bank said in a statement. This is a tough action from the bank to restrict financial instruments in the country.
“Today, high financial risks remain on the world currency and commodity markets. Pay attention to them, ”the bank added.
In recent months, ICBC and other banks, including the Bank of China and China Merchants Bank, have ceased foreign exchange trading activities that allow private clients to trade non-yuan pairs. Chinese regulators began to tighten control over the country’s foreign exchange market last month. Previously, the country’s banks suffered from risky investment products. Last year, following the collapse in oil prices, Bank of China clients suffered losses on crude oil-related products.
