STAFF REPORTER

Beijing will raise the ceiling on the amount of renminbi that can be taken in and out of the country from 6,000 yuan to 20,000 yuan, the central bank said yesterday.

In an announcement posted on its website, the People's Bank of China said the new ceiling would take effect on January 1. It is the first time the bank has raised the limit in 11 years.

Beijing imposed a ban on the export of renminbi in 1951. In 1987, citizens were allowed to take 200 yuan in and out of the country. The ceiling was raised to 2,000 yuan in 1990 and to 6,000 yuan in 1993.

The bank said the latest change was made "to meet the actual needs of China's economic development and foreign-exchange needs".

A spokesman for the bank was quoted as saying on the website that the adjustment was necessary in view of the increased exchanges between China and other countries, the stable exchange rate and strong currency.

"There has also been an increase in exchanges between the mainland and Hong Kong and Macau since the reunifications. This has generated a high demand for renminbi," he said.

Demand from other countries, such as Russia, Mongolia, Vietnam and Myanmar, was also rising, the spokesman added.

He admitted the ceiling of 6,000 yuan failed to meet the needs of mainlanders travelling overseas for tourism, business or study. The same also applied to foreigners visiting the mainland.

In adjusting the ceiling, the bank took into account spending patterns and the number of visitors travelling in and out of the country.

The spokesman said the relaxation was unlikely to harm the country's economic development.

Officials had set up clearing systems to ensure the renminbi flowed back from Hong Kong and Macau, he said, adding it had also forged clearing pacts with neighbouring countries. "The measures will guarantee the in-flow of renminbi and there won't be a big impact on domestic money circulation," the spokesman said.

He added that Beijing would continue to take measures to promote cross-border currency flow by promoting the development of financial services with other countries. It also would establish an alert system to warn of possible financial crises and enhance co-operation with other countries in the fight against counterfeiting.

Authorities also would strengthen the fight against money laundering by monitoring the flow of large amounts of money.