| Forex trading widened |
| Wednesday,March 09,2005 Posted: 14:24 BJT(0624 GMT) |
| BEIJING, March. 9 -- Market participants will be able to begin trading foreign currency pairs for the first time on the Chinese mainland in May, a development that is part of broader foreign exchange reforms.
Eight foreign currency pairs would be allowed to be traded onshore initially and nine market makers had been selected, said the China Foreign Exchange Trade System (CFETS), the central house where all onshore currency transactions must be managed and cleared. The planned expansion of the foreign currency trade in Shanghai builds on the four yuan pairs currently traded onshore. These are the yuan against the U.S. dollar, the euro, the Hong Kong dollar and Japan’s yen. “(The new products) will offer domestic banks more competitive abilities on price and better satisfy local banks’ foreign exchange investment and hedging needs, raising the effectiveness for foreign exchange use domestically and easing appreciation pressure on the yuan,” the CFETS said. The introduction of foreign currency-to-foreign currency trading was also aimed at bringing market-maker mechanism into the local market and can act as a trial platform for yuan trading products, the CFETS said. This would help the development of, and training for, derivatives based on the local currency, it said. The foreign currencies to be launched will be the euro, U.S. dollar, Hong Kong dollar, Australian dollar, Canadian dollar, British pound, Swiss franc and Japanese yen. They will be paired as: EUR/USD, AUD/USD, GBP/USD, USD/JPY, USD/CAD, USD/CHF, USD/HKD, EUR/JPY. “Adjustments or additions will be made in the future according to market reaction,” said the CFETS, which is also known as the National Interbank Funding Center. Interbank trading of bonds and yuan funding also are centralized at this agency. The Shanghai-based CFETS is sponsored by the nation’s central bank, the People’s Bank of China, but operates independently. Seven foreign banks, including Deutsche Bank AG and HSBC Holdings are among the first batch of market makers. Enditem (Shenzhen Daily/Agencies) |
| (Source: English Site of Kuching) |
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