Chinese banks can now set their own exchange rates between the yuan and the US dollar for some customers, the government said, in a small step towards liberalisation of the tightly controlled currency.
Banks can decide the "spread" -- the range between the buying and selling price -- for customers based on market demand, according to a central bank statement posted on the website of the State Administration of Foreign Exchange late Wednesday.
The announcement comes before key talks next week at the Strategic and Economic Dialogue between China and the United States, which is expected to push Beijing for greater economic reforms.
China keeps a tight grip on the yuan -- also known as the renminbi -- allowing it to move up or down two percent daily on either side of a mid-point set under the supervision of the central bank.
The latest announcement aims to "further improve the market-oriented yuan exchange rate formation mechanism", the People's Bank of China, the central bank, said in the statement.
Previously, the bank set specific limits on the bid-ask spread depending on the transaction type, state media said.
Analysts said the impact of the shift would be limited as it was aimed at retail customers, who make up a small proportion of foreign exchange trading, while corporate clients are already offered more market-based rates.
"This reform will not have any impact on renminbi exchange rates or the formation of mid-point prices," Liu Dongliang, a senior analyst with China Merchants Bank, said in a research note.
China has been promoting greater international use of the yuan and taking measures to make its exchange rate more flexible, although full convertibility of the currency remains far off, analysts say.
The PBoC in March doubled the daily trading band for the yuan against the dollar from one percent to two percent.
The government could further expand the daily trading limits between the yuan and other foreign currencies as part of future reforms, Liu said.
GMT 11:02 2018 Tuesday ,11 December
ASE opens trading on lower noteGMT 15:40 2018 Monday ,10 December
Amman stock market closes trading at JD4.4 millionGMT 19:10 2018 Wednesday ,05 December
Index at Palestine stock market drops by less than one pointGMT 17:58 2018 Sunday ,25 November
Amman stock market wraps up trading at JD2.6 millionGMT 14:24 2018 Thursday ,22 November
Russia’s stock market demonstrates record-breaking figures in 2018GMT 11:45 2018 Tuesday ,20 November
Tokyo stocks close lower as tech issues weigh, Nissan tumblesGMT 15:08 2018 Monday ,19 November
Amman stock market wraps up trading at JD6.1 millionGMT 15:51 2018 Sunday ,18 November
U.S. stocks post weekly losses amid tech shares routMaintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©
Send your comments
Your comment as a visitor