BEIJING, Dec 5 (Reuters) - China has agreed to temporarily waive limits on how much foreign banks can borrow from abroad so they can raise funds to ease liquidity strains, the U.S. government said on Friday.
A fact-sheet distributed after a meeting of the Sino-American "Strategic Economic Dialogue" said:
"To promote financial stability, China's State Administration of Foreign Exchange will allow foreign banks to increase their liquidity through either guarantees or foreign currency loans from overseas affiliates on a temporary basis, notwithstanding foreign currency debt quotas," the fact sheet said.
Some foreign banks in China have been caught in a cash crunch as counterparties have reduced their exposure during the current credit crisis.
"This action helps maintain investor and depositor confidence so that U.S. banks can continue to grow their business in China," the statement said. (Reporting by Glenn Somerville; Writing by Alan Wheatley; Editing by Ken Wills)