- Registration time
- Last login
- Online time
- 0 Hour
- Reading permission
the Reform of RMB’s Exchange Rate
In recent two years, the reform of the RMB’s exchange rate has always drawn extensive concern at domestic and the abroad. From 1994 to this day, China’s management system of foreign exchange has experienced important reforms. While the complete convertibility is feasible under the situation of regular items, administrable RMB’s exchange system, which floating rate keeps at 8.27 levels or so for several years, has nominally been put into effect.
Recently China’s economy has witnessed a continuous and high-speed development and its trade surplus has gradually enlarged and its foreign reserve has also increased rapidly. So more and more people are aware that it is necessary to establish a more flexible management mechanism of RMB.
On July 21, a RMB’s exchange system, characterized by an administrable floating rate and also basing on the supply and demand of markets as well as adjusting it according to a package currency, was put into practice by the China Center Bank. The reform involves three main aspects: to adjust the exchange rate from USD 1 to RMB 8.28 to USD 1 to RMB 8.11, an increase of 2%, to fix the rate according to the package currency not to the USD, thirdly, fluctuation margin of the RMB’s floating rate within 0.3% each day comparing with the closing price of the previous day is allowable.
On August 9, the China Center Bank announced to reform the foreign exchange markets among banks, which means to open the market to non-banking facility and non-financial enterprises. At the same time, inquiring price, a new trading method with more obvious market’s features, as well as the postponed foreign exchange transaction and swap transaction are also introduced into the market at the first time, which indicates the China Center Bank is gradually taking up with pushing forward the reform of the RMB’s exchage rate.