The People's Bank of China, or the central bank, on Friday issued new individual foreign currency regulations, in a bid to facilitate individual foreign exchange transactions.

The regulations, which will come into effect on Feb. 1, 2007, impose an annual quota on foreign exchange settlements of individuals, abolishing the previous limit for every single settlement transaction.

For transactions within the annual quota, individuals can handle foreign exchange settlements directly in a bank.

Beyond the quota, settlement transactions under current account must go through the inspection of a bank and those under capital account are subject to the foreign exchange authorities.

The annual quota will simplify the procedures for individual foreign exchange settlements, said a central bank spokesman, adding that China put an annual quota on foreign exchange purchases by individuals in May, resulting in an increase of 210 percent in purchases in May to November over the same period last year.

The new regulations aims to facilitate foreign exchange flows in personal trade, by allowing individuals to open settlement accounts and treating personal traders the same as trading companies.

No quotas are imposed on foreign exchange settlements or the purchases of personal traders that are registered with the commerce authorities.

The regulations also provide guidance for capital account transactions of individuals.

Mainland residents can entrust banks, fund management companies and other domestic financial institutions to invest in financial products overseas, including stocks and bonds, according to the regulations.

The annual quota also applies to capital account foreign exchange settlements and purchases of individuals.

China will gradually relax restrictions on capital account foreign exchange transactions as the country continues to make the Renminbi convertible under capital accounts, said the spokesman.

The foreign exchange authorities will strengthen the monitoring of foreign exchange transactions, especially those that are big and suspicious, and crack down on money laundering and other criminal activities, said the spokesman.

Editor: Yan