Market bears smell blood as China scrambles to tighten grip on capital outflows

China's increasingly aggressive measures to clampdown on capital outflows will not have gone unnoticed by U.S. hedge-fund manager Kyle Bass.Bass is famed for his successful bet against the U.S. housing market in the global financial crisis, so markets monitor his comments closely. He has long argued the yuan, or renminbi (RMB), is set to fall 30 percent against the dollar and he sees capital outflows as backing his view."China's capital outflows are worse than they appear, which is why the government has allowed the RMB to depreciate over the last two months," Bass told Reuters."We believe this pressure will continue with the prospect for higher interest rates in the U.S."

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China is trying to tighten its grip on capital outflows after a slide in the yuan this year of almost 6 percent, which has pushed the currency down to levels last seen more than eight years ago and revived memories of a wave of capital flight late last year and in January.China's Vice Finance Minister Zhu Guangyao was quoted on Saturday as saying policymakers were watching capital outflows closely.Bank of China, the country's biggest currency trading bank, has begun to sharply limit corporate customers' ability to purchase foreign exchange in Shanghai, sources said on Friday. Customers who insist on buying foreign currency are being restricted to $1 million, compared with no caps previously.Among other moves, the State Administration of Foreign Exchange (SAFE) is vetting transfers abroad of $5 million or more, down from $50 million previously, and is stepping up scrutiny of major outbound deals, sources said.  Astrology and Numerology Trading Tips