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China issued new forex regulations

www.chinanews.cn 2005-09-23 14:58:34

Chinanews, Beijing, Sept. 22 (By Wei Xi) - The State Administration of
Foreign Exchange (SAFE) has issued today "Notice of SAFE's new management
method adjusting bank forex and liquidity" and decided to implement a
unified liquidity management system. This move will hopefully further
develop the foreign exchange market, strengthen the flexibility and
initiative of those designated forex banks that handle forex transaction
and settlement.
The just enacted "Notice" expands the current scope of forex settlement
and realizes unified liquidity management, leaving management room for
later development of RMB to foreign exchange derivative product markets
and the deepening of foreign market capabilities. It also sets uniform
management policies and quota standards for both domestic and foreign
banks, aiding fair competition between banks.
"Notice" clearly states that Chinese banks and foreign banks with
permission to deal in RMB businesses can, within one month, apply to SAFE
for ascertaining that the forex settlement satisfies overall liquidity
requirements.
Relevant SAFE officials said that from this point onwards SAFE will, in
accordance with various factors such as market guidance, controllable
risks, the principle of gradualism, overall considerations of financial
adjustments, conditions of international balance of payment, forex market
development and bank operating needs, continue to perfect bank settlement
and unified liquidity management.

          ��14 banks expanded forex hedging services
          ��Forex reserves around 744.6b USD by July
          ��Forex savings drop by 592m USD in July
          ��China raises limits on individual forex buying
          ��Forex control loosened on domestic companies
          ��Soaring forex reserve challenges financial strategy
          ��Watchdog to loosen forex restrictions

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