Home>News Center>China
       
 

China reforms forex rate forming mechanism
By Zhang Dingmin (China Daily)
Updated: 2006-01-04 06:00

China announced a further move to reform its exchange rate forming mechanism yesterday, introducing an internationally prevalent price-finding mechanism in the interbank foreign exchange market.

China announced a further move to reform its exchange rate forming mechanism yesterday, introducing an internationally prevalent price-finding mechanism in the interbank foreign exchange market.
Renminbi banknotes are displayed in this photo taken on December 21, 2005. [newsphoto]
The introduction of OTC (over-the-counter) transactions will improve the exchange rate transmission mechanism and help meet businesses' risk-hedging needs.

But it will not broaden fluctuations of the renminbi exchange rate, the central bank said.

"With a view to improving the managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies, promoting development of the foreign exchange market, diversifying the mode of foreign exchange transactions, and strengthening the pricing capability of the financial institutions, OTC transactions will be introduced in the interbank spot forex market starting today," the People's Bank of China (PBOC) said in a statement.

Participants in the interbank forex market now will be able to engage in forex transactions either based on centralized credit authorization and price bidding, or the new OTC market, which is based on bilateral credit authorization and settlement.

The system of market makers that are obliged to quote both selling and buying prices are introduced at the same time to provide liquidity.

The new OTC market will deepen the forex market so as to lay a solid foundation for improving the formation mechanism of the renminbi exchange rate, and enhance the representativeness of the central parity of the Chinese currency in the new market structure.

This is because the prices quoted by market makers reflect not only their expectations of daily purchases and sales of forex and positions resulted from market making transactions, but also their judgments of movements in the international market, the central bank said.

It will also help enhance the core competitiveness of financial institutions, particularly market makers, and encourage them to provide a richer variety of exchange rate risk management tools for businesses and households, the central bank said.

"After the exchange rate reform, the central bank will have to provide hedging tools to be able to execute a managed floating exchange rate system," said Zhang Xuechun, an economist with the Asian Development Bank.

After its landmark reform on July 21 last year that let the renminbi appreciate by 2 per cent to US dollar and linked the currency to a basket of currencies instead of the US dollar, China has taken a slew of measures to establish a market-oriented exchange rate formation mechanism, including the launch of risk-hedging tools like forwards and swaps.

"The next natural move could be the broadening of participants of OTC transactions," she said, noting that the OTC market is still confined to the interbank market, where only financial institutions are allowed.

The central bank said renminbi exchange rate will unlikely experience larger fluctuations after the new method is adopted to form the central parity, stressing that the floating bank of the renminbi exchange rate remain unchanged.

The central parity of the renminbi against US dollar, based on which banks quote their prices, will now be decided on the weighted average of prices from all market makers, after excluding the highest and lowest offers.

The central parity of renminbi against the euro, the Japanese yen and Hong Kong dollar will be determined by the renminbi-US dollar central parity and the exchange rates of those currencies against the US dollar in the international market.

(China Daily 01/04/2006 page1)



Giant pandas to land in Taiwan in June
Sewage leak creates hole in city road
Nation celebrates new year
  Today's Top News     Top China News
 

China reforms forex rate forming mechanism

 

   
 

Telephone subscribers to top 820m

 

   
 

Migrant dads return home suspicious

 

   
 

Green boost for Beijing in blueprint

 

   
 

Bird flu outbreak reported in Sichuan

 

   
 

Yunnan establishes ethnic group gene bank

 

   
  China reforms forex rate forming mechanism
   
  Bird flu outbreak reported in Sichuan
   
  Green boost for Beijing in blueprint
   
  Cold front brings freezing fog, transport problems
   
  Telephone subscribers to top 820m
   
  Yunnan establishes ethnic group gene bank
   
 
  Go to Another Section  
 
 
  Story Tools  
   
  Related Stories  
   
China must beware dollar fall - bank adviser
   
Yuan gains; revaluation pressure to ease
   
China restates yuan to rise gradually
   
China: No change to yuan policy
   
Currency decisions 'sovereign' - Snow
   
Snow: China should get credit for yuan moves
  News Talk  
  It is time to prepare for Beijing - 2008  
Manufacturers, Exporters, Wholesalers - Global trade starts here.
Advertisement
         
主站蜘蛛池模板: 国产破处在线观看| 成人免费v片在线观看| 亚洲成av人在线视| 看**视频一级毛片| 四虎永久免费观看| 韩国本免费一级毛片免费| 国产精品午夜爆乳美女视频| aa级国产女人毛片水真多| 成人综合久久综合| 久久久精品人妻一区二区三区蜜桃 | 久久人妻AV中文字幕| 果冻传媒高清完整版在线观看| 亚洲最大成人网色| 污污视频网站免费| 从镜子里看我怎么c你的阅读视频| 精品欧美一区二区三区久久久| 国产中文欧美日韩在线| 麻豆国产在线不卡一区二区| 国产浮力影院第一页| 自拍偷拍校园春色| 国产网址在线观看| 91麻豆久久久| 在线亚洲小视频| a级毛片视频免费观看| 好多水好硬好紧好爽视频| 一级毛片一级毛片一级毛片| 成人欧美一区二区三区黑人| 中文字幕欧美视频| 无人视频免费观看免费直播在线观看 | 亚洲免费观看视频| 欧美成a人片在线观看久| 亚洲欧美四级在线播放| 污污网站在线观看| 亚洲精品在线免费观看| 火影忍者narutofootjob| 人妻体内射精一区二区| 玉蒲团之天下第一| 人人妻人人澡人人爽曰本| 狠狠噜狠狠狠狠丁香五月| 人妻影音先锋啪啪av资源| 男女做爽爽免费视频|