Beijing cracks down on overseas cash withdrawals
The new cap also applies to MasterCard and Visa cards issued in China. Cardholders who exceed the limit will be added to the watch list of UnionPay and won’t be able to withdraw more cash abroad, the official added.
Until the end of the year, UnionPay clients will be able to withdraw up to 50,000 yuan ($7,865), said the official.
China previously had set a daily cash withdrawal limit of 10,000 yuan ($1,573), which is part of the restrictive measures to prevent the capital outflow.
The new arrangement was also confirmed by State Administration of Foreign Exchange (SAFE).
“Recent monitoring found that some UnionPay card holders have made frequent, large cash withdrawals overseas, foreign financial regulators have also been alerted on this," Reuters quotes SAFE as saying. The move is aimed at limiting "money laundering risks,” according to the organization.
The country’s foreign exchange reserves fell to $3.56 trillion in August as the People's Bank of China intervened in the currency market to prop up the yuan and prevent money leaving the country. Reserves fell by $93.9 billion, which is a record monthly drop.
The capital outflow is linked to the Chinese stock market plunging 40 percent since the middle of June and the People's Bank of China's 4.4 percent yuan devaluation in August.