PBOC reportedly drafting tax for FX transactions

China's central bank has drafted rules for a tax on foreign-exchange transactions in a step to stem speculators, according to Bloomberg News.

Known as the "Tobin tax", it is designed to raise the cost for spot currency conversions, and is described by its originator, Nobel-winning economist James Tobin, as "throwing sand in the wheels of speculators". Citing anonymous sources, Bloomberg reported on Tuesday that the initial rate may be kept at zero to allow authorities to refine the rules.

The People's Bank of China didn't immediately respond to request for comments. Vice-governor Yi Gang has raised the possibility on several previous occasions but did not hint whether it would materialize any time soon.