▲The headquarters of the People’s Bank of China in Beijing Photo: IC
Two major Chinese banks on Monday issued warnings of potential fluctuations in global financial markets during the upcoming US presidential elections, and vowed to make adjustments to cope with the potential risks, in what experts call a rare move.
Following the elections on November 3, precious metals and the foreign exchange market could see “sky-high” fluctuations, liquidity would be significantly low, and market risk will be exacerbated, the Bank of China said in a statement on its website.
In a separate statement, the Bank of Communications issued a similar warning of major fluctuations in the global financial market, and tightened liquidity that could affect business.
The US is reported to have a chaotic presidential election, and the race could be so tight that major legal battles could follow and results might not be known on Election Day.
Given the potential chaos, global financial analysts have cited the election as one of the biggest risks at the moment for financial markets. They also vowed to make temporary adjustments in various businesses to cope with possible fluctuations and tightened liquidity.
Bank of China said that, among other measures, it is prepared to lower the limit for single transactions in precious metals, foreign exchange and other accounts to cope with tightened liquidity.
The Bank of Communications said that it could make adjustments or limit certain transactions in the event of major market fluctuations and tightened liquidity. Further details about the potential adjustments would be announced later, the bank said.
Both banks urged investors to raise their risk alert and make reasonable and cautious moves and investments to cope with market fluctuations.