o  Spreads on ECBs and trade credits were increased and the all-in-cost ceilings on ECBs were dispensed with under the Approval route. •  Limit on overseas borrowings by banks was enhanced from 25 percent to 50 percent of unimpaired Tier I capital. Overseas borrowings for on-lending to exporters continue to remain outside the ceiling.
Exchange rate policy has played a role in achieving these macroeconomic objectives. It also has an impact on China’s competitiveness, trade relations and resources allocation. Therefore, improving the managed floating exchange rate regime and gradually enhancing exchange rate flexibility will help make monetary policy more flexible and effective, and strengthen the ability to conduct macroeconomic management. I.