By Mike on Wednesday,
PBOC opens onshore fx market onshore interbank.
Foreign central banks are allowed to enter land interbank foreign exchange market of China, the People’s Bank of China said on Monday as the second largest economy in the world moves to liberalize its foreign exchange regime. The People’s Bank of China said on Monday it would allow foreign central banks to trade in the foreign exchange market in the country.
The central bank said central banks worldwide access to operations and options in the foreign exchange interbank spot market would be advancing in China, according to a statement on its website. About PBOC opens onshore fx market onshore interbank the PBOC said that there is no obligation for foreign central banks to build up reserves for the trade of currency risk in China, such as the requirement only applies to companies against the banks. Earlier this month, China’s central bank issued new rules, banks buy and sell foreign currency in US dollars before to deposit up to 20% of its turnover as reserves for the customer.
About PBOC opens onshore fx market onshore interbank Foreign central banks may directly yuan spot trading, forwards, swaps and options against other currencies, the central bank said in a statement, without specifying a timeline. “The People’s Bank of China and the State Administration of Foreign Exchange has been actively pushing for open market access China’s foreign exchange, the introduction of foreign participants in a constant and orderly manner,”.
“Open access to foreign central banks is in line with China’s goal of increasing the overall use of yuan,” About PBOC opens onshore fx market onshore interbank also added Mark Williams, chief China economist at Capital Economics.
The People’s Bank of China surprised markets by introducing a new mechanism for calculating the fixed rate in a move towards a more market-based mechanism. The yuan has depreciated for more than 3% against the US dollar, raising fears of further depreciation and capital outflows.