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The People’s Bank of China (PBOC) is drafting rules for a tax on foreign currency transactions in China, in an effort to help curb currency speculation, a potentially extreme policy move, and according to sources quoted by a Bloomberg article earlier today.
The aim of the so-called Tobin tax, would be geared towards speculators, and not per-say the needs of hedgers or importers/exporters – while it’s still unclear how such businesses could be affected. Nonetheless, at least initially the rate may be held at zero, until an appropriate percentage is determined for any such forex Tax.
According to feedback from FX professionals ... (read more)