BEIJING, June 26: China said on Tuesday that it was set to tighten the monitoring of speculative capital inflows and the crackdown on fraudulent export transactions that disguise the movement of speculative funds.

The State Administration of Foreign Exchange, an arm of the central bank, said in a statement on its website that it has found “some problems” in commercial banks' foreign exchange dealings.

“Problems in the authenticity investigation of transactions involving foreign exchange have enabled speculative funds to enter China's stock and properties market, and thus affect China's marcoeconomic conditions,” it said.

“Commercial banks themselves have sometimes not complied with procedures in dealing with foreign exchange transactions... and some data submitted by banks are not up to the regulator's requirements,” said the administration.

In 2006, the administration punished 19 domestic and 10 foreign banks for similar violations, it added.

Last week the banking regulator reprimanded and fined eight domestic banks for lending 3.14 billion yuan ($410 million) to two state-run enterprises that illegally invested the funds in land and stocks.—AFP