For the first time since the August collapse, Offshore Yuan is trading over 1000 pips weaker (relative to the USDollar) than onshore Yuan, signalling outflows are once again escalating. Following the chaos in HIBOR money-markets, Offshore Yuan has crashed to 6.5970 (below August spike lows) to the weakest since Dec 2010. On the heels of this recent divergence between on- and off-shore Yuan, China has suspended some foreign banks from FX trading, we suppose to try and stem the capital outflows.

Offshore Yuan has crashed to 5-year lows against the USDollar...

And blown over 1000pips weaker than onshore Yuan...

Sending signals that outflows are starting to accelerate since The IMF gave China permission to devalue its currency....

Perhaps that is why Reuters reports that:

China's central bank has temporarily suspended some foreign exchange businesses of several foreign banks until the end of March, three sources with direct knowledge of the development told Reuters on Wednesday. Included among the suspended services was liquidation of spot positions for clients and some other services related to cross-border, onshore and offshore businesses , the sources said. The People's Bank of China (PBOC) sent a notice to the impacted foreign banks on Monday, the sources said. The sources, speaking on the condition that the banks not be named, said they had seen the relevant directive. The PBOC, when contacted by Reuters, had no immediate comment. The move might have the effect of helping stabilize the yuan's exchange rate and cushion capital outflows due to the Chinese currency's recent depreciation.

Time for a significant crackdown on the supposedly free-floating currency of The IMF's choice or another significant devaluation is coming soon.

To put it another way - China just unveiled 'open' capital controls... and the last time they did that Bitcoin soared.