China's first foreign exchange company has opened in Shanghai as the country loosens restrictions on currency trading.

Easy Exchange is owned by Shanghai Lujiazui Development (Group) Co and it has set up three outlets in the city with six more to follow at an unspecified date, an unnamed company official said.

One outlet is in Lujiazui, another at Shanghai Pudong International Airport and the other on Yuanshen Road in Pudong New Area will all act as agents for banks with the exchange rates set by lenders. The Lujiazui Easy Exchange is affiliated with the Bank of China.

There is no transaction commission.

The outlets exchange nine foreign currencies, including the United States dollar, British pound, Japanese yen, and Hong Kong dollar, into yuan.

Transactions are limited to US$5,000 or the equivalent in another currency. Identification documents - such as an ID card for Chinese and a passport for expats - are needed for the exchange.

In the future, when Easy Exchange fully opens, the company will determine its own exchange rate and offer two-way exchange (yuan to forex, forex to yuan), said the unnamed official.

Easy Exchange plans to open about 50 such outlets in the city in the coming years, but will start cautiously, the official said.

The Easy Exchange official declined to give more details such as when it will fully open.

China is making efforts to loosen control on foreign currency exchange.

On February 1, authorities more than doubled the foreign exchange quota for individuals from US$20,000 to US$50,000 to siphon mounting forex reserves. The US$20,000 limit was set last May.

Between May and November 2006, foreign currencies bought by individuals skyrocketed 210 percent in terms of value year on year and ballooned 255 percent in terms of transactions. An exact figure was not provided.

Lujiazui Group formerly planned to hold a ceremony for the launch of Easy Exchange on February 1. Some senior forex officials were expected to attend, sources said. However, the ceremony was postponed for unknown reasons.

The Shanghai headquarters of People's Bank of China said in early 2006 that it would start trial small sum foreign currency exchanges in Pudong.

(Shanghai Daily February 28, 2007)