金融英语chapter.pptVIP

Part Three Chinese Foreign Exchange System I. Overview Before 1979, due to severe lack of foreign exchange resources, the foreign exchange control was strictly enforced. The reform of Chinese foreign exchange system accelerated in 1994 with the introduction of conditional current account convertibility, unification of exchange market and adoption of a market-based managed floating exchange rate. On November 27,1996, China formally lifted all remaining current account restrictions and became an Article 8 of International Monetary Fund. The State Administration of Foreign Exchange (SAFE) is the agency responsible for foreign exchange administration. SAFE has the similar branch structure with that of PBC, China’s central bank. The commercial banks and financial institutions may handle the designated transactions approved by the SAFE. Foreign exchange includes: 1.Foreign currencies, including bank notes and coins; 2.Payment vouchers; 3.Securities denominated in foreign currency; 4.Super-national currencies; 5.Other assets denominated in foreign currency. The Report System: All entities and individuals involved in transactions in foreign currency must report data for compilation of balance of payments statistics. II. Exchange Arrangement China has maintained a unified managed floating exchange rate since January 1994. The Forex rate is determined by the inter-bank foreign exchange market. The PBC announces a reference rate for RMB against US$, Japanese Yen and HK$. The daily movement scope is +0.3% for RMB vs. US$, +1% for RMB vs. JPYen and HK$, +0.5% for RMB vs. other currencies. The designated banks can quote the buying and selling rates for their clients and conduct transaction. SAFE is responsible for supervision to the foreign exchange market. III. Forex Operations of Financial Institutions The authorized financial institutions which have gotten a license, shall open foreign exchange accounts for their clients. The forex institutions are