China's central bank tightens limit for firms to borrow abroad

South Korean won, Chinese yuan, Japanese yen and U.S. dollar banknotes are seen on this picture illustration taken in Seoul, South Korea, December 15, 2015. /Reuters

China's central bank said on Thursday it had tightened the limit for domestic firms to raise funds in overseas markets as part of efforts to rein in cross-border financing risks.

The People's Bank of China (PBOC) lowered a parameter on cross-border corporate financing under its macro-prudential assessments to 1 from 1.25, it said in a statement (link in Chinese) published on its website.

That reversed a move in March when the central bank eased conditions allowing domestic coronavirus-hit firms to conduct overseas funding more easily.

China has recorded a steady rebound from the coronavirus crisis, with manufacturing activity sustaining its recovery to pre-pandemic levels.

The string of upbeat data has led economists to forecast some winding down in 2021 of China's easing measures introduced since the start of the pandemic.

(With input from Reuters)