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Bank of China to be forex market maker

www.chinanews.cn 2005-03-16 16:35:21

Chinanews.com, Mar. 16 - The China Foreign Exchange Trade Center (CFETC)
signed an official cooperative agreement with the Bank of China (BOC)
yesterday. According to this agreement, the BOC would become the market
maker for CFETC's foreign currency trade in May.
Li Yu, vice-president of CFETC, said that the inter-bank market would
begin to buy and sell foreign currencies in May as a crucial component of
the basic construction of China's financial market. This business would
help to create depth in the inter-bank foreign exchange market. In
addition, it would benefit medium and small sized financial institutions
that have no direct access to the foreign exchange market due to risk
rating and company scale restrictions. By expanding China's foreign
exchange market and creating better measures of its supply and demand,
this move would help improve the mechanism that determines the Renminbi
exchange rate, as well as serve as a trial balloon and decision-making
basis for the full convertibility of RMB.
The BOC will initially introduce eight currency pairs: USD-HKD, USD-JPY,
USD-GBP, USD-AUD (Australian Dollar), USD-SHF (Swiss Franc), USD-CAD
(Canadian Dollar), USD-EUR and EUR-JPY.
As a market maker, the BOC will actively participate in trading the
above-mentioned eight foreign currency pairs in the CFETC. Meanwhile, the
center will choose the BOC's worldwide foreign currency payment system
and network as its main channel for capital settlement in the forex
market.

          ��Asian banks reduce dollar holdings (2005-03-16)
          ��China Merchants Bank topped competitiveness-ranking list
(2005-03-15)
          ��Banking reform to continue despite scandals, central bank
official (2005-03-10)
          ��Listings of two big State banks imminent (2005-03-08)
          ��State banks to go public soon (2005-03-07)

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