China will raise the ceiling on domestic companies’ offshore lending and unify rules for yuan and foreign-currency loans, giving firms greater financial flexibility to support global expansion.
Under new rules released Friday by the People’s Bank of China and the State Administration of Foreign Exchange, the macro-prudential adjustment coefficient for outbound loans was raised to 0.6. The coefficient, which was last increased from 0.3 to 0.5 in 2021, acts as a multiplier against a company’s latest audited equity to determine its maximum allowed offshore loan balance. A higher coefficient effectively allows businesses to channel more capital abroad.
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