With the yuan trading at a 6 year low against the greenback and with the Chinese economy still loitering in the doldrums, regulators are especially eager to clamp down hard on the rabid underground economy.

Financial News has reported, citing a senior official at China’s foreign exchange regulator, the uncovering of illegal underground bank transactions worth $148 billion (more than 1 trillion yuan).

Intensifying its crackdown on capital outflows, the State Administration of Foreign Exchange (SAFE) will step up its investigations so as to foster a healthier ground for developing China’s foreign exchange market, said Zhang Shenghui, a senior director at SAFE.

In 2016 alone, SAFE has uncovered illegal capital outflows to the tune of $8.43 billion. As per Zhang Shenghui, with the help of the police, SAFE has busted 56 cases of illegal transactions routed through underground banks.

SAFE has already come down on three banks for inadequacies related to compliance measures which lead to several companies who had used fake trades to buy foreign currencies, reported Financial News.

Incidentally, the news agency is affiliated with China’s central bank – the People’s Bank of China.

Earlier this month, Xinhua, a state-run news agency had reported that the police in Guangdong had busted underground banks that handled nearly $35 billion in illegal money transfers this year.

This month, the Chinese yuan has tanked against the USD and has breached the key psychological support barrier of 6.7 on October 10. It is currently being traded at its 6 year low.

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