PBOC Adjusts Cross-Border Borrowing Rules to Encourage Inflows as Yuan Slumps

(Bloomberg) — China’s central bank adjusted rules to allow companies to borrow more from overseas, enabling more foreign capital inflows at a time when the currency is plunging to fresh 2008 lows against the dollar.

The People’s Bank of China raised the so-called macro-prudential parameter for companies and banks’ cross-border financing to 1.25 from 1, in order to increase their source of funding, the central bank said in a statement Tuesday. Raising the parameter would allow companies to borrow more from overseas markets.