Major Initiatives To Promote Independent Pricing In The Foreign Exchange Market

Here world clothing shoes The Xiaobian of the hat net is to introduce the elimination of the sale and spread of US dollar listing: further reform of exchange rate marketization.

New progress has been made in foreign exchange management reform. In July 2nd, the State Administration of Foreign Exchange announced that in order to further improve the formation mechanism of RMB exchange rate marketization, the people's Bank of China recently issued the notice of the people's Bank of China on matters relating to the exchange rate of interbank foreign exchange market and the management of bank listing and exchange rates, canceling the management of bank's bid price difference for us dollars, and independently pricing by banks according to market supply and demand, so as to promote the independent pricing of foreign exchange market.

　　 Successful reform measures

An expert on international finance and Zhao Qingming, chief macroeconomic researcher of Beijing Financial Derivatives Research Institute, told an interview with our reporter: "the management of banks to cancel the sale and purchase of the US dollar against the US dollar is in line with the direction of market reform, and is also a matter of course at the present stage of the development of the foreign exchange market."

This means that Bank We can adjust the buying and selling price of US dollar cash and cash, instead of being controlled by the range of spreads. The dollar, like other non US dollar currencies, is no longer limited by the spread of cash and cash.

Zhao Qingming said that before the relevant regulations on the management of the spread of the US dollar were put forward, the original intention was to protect the interests of foreign exchange parties such as enterprises and individuals, so as to prevent banks from overcharging the spread and thereby harm the interests of the foreign exchange buyers. "Earlier, foreign exchange designated banks were few and foreign exchange businesses were relatively small. If banks do not manage the difference, banks may do their best to make the difference bigger because the price itself represents the profits and costs of banks." Zhao Qingming said, "with the gradual increase of foreign exchange business, the number of banks selling and selling foreign exchange business has gradually increased, and the market competition has been more complete. At present, there is no need for the price difference in listing and selling of banks, so it is a natural reform measure." In July 2005, the central bank issued the notice of the people's Bank of China on matters relating to the exchange rate between the interbank foreign exchange market and the designated exchange rate of designated foreign exchange banks, which stipulates that "the price of the US dollar to RMB exchange traded on the designated foreign exchange banks designated by the designated foreign exchange banks must not exceed 0.2% of the median price of the US dollar transactions announced by the Chinese people's Bank, and the cash price of the cash shall not exceed 1% of the middle price of the spot exchange market"; "the difference between the selling price and the buying price of the non US dollar currency shall not exceed 0.8% of the middle price of the spot exchange transaction".

In September 23rd of that year, the central bank issued a notice that the difference between the selling price of the US dollar against the RMB and the buying price should be adjusted to "1% of the middle price of the US dollar transaction announced by the people's Bank of China". The difference between the selling price of the cash and the buying price should not exceed 4% of the middle price of the US dollar transaction. And the restrictions on the spread of the non US dollar currency against the RMB exchange rate and the cash sale are cancelled.

In March 12, 2012, the designated foreign exchange banks ceased to submit the daily list of the exchange rates according to the requirements of the foreign exchange bureau.

　　 Market impact will not be too obvious.

As for the impact of the cancellation of the US dollar listing and bid spread management, some foreign exchange traders said that the overall impact of the move is not expected to be too obvious in the short term, and that the impact will mainly come from small customer groups, but the impact will not exceed the management's expectations.

In addition, market analysts from ICBC said: "there is no need to worry that the price spreads will become larger after the lifting of the restrictions, because the current market has passed the initial stage of development, and the competition is quite adequate." At the same time, the notice issued by the management clearly requires banks to set up and improve the internal management system of listed exchange rates, effectively prevent risks and avoid unfair competition.

Foreign exchange traders from commercial banks said that although banks could break the restrictions and decide the maximum selling price and the lowest buying price after the cancellation of the spread of the US dollar, the possibility that banks would substantially adjust the selling price and buying price was not large in the short term. This is because the bank's foreign exchange capital cost is there. In addition, the market competition and pattern also affect bank pricing. On the other hand, the current volatility of the spot rate and the intermediate price has not changed, which determines that the cancellation of the spread will not lead to a big change in the market structure.

　　 Conform to the direction of market-oriented reform

The reporter also noted that in addition to canceling the management of bid spread of the US dollar, the reform also called for "absorbing the new progress in the management of RMB's central price and the floating rate of trading price since 2011, and further enhancing policy transparency", which also conforms to the direction of reform of foreign exchange management.

"This reform is also an important step in advancing the formation mechanism of RMB exchange rate marketization, which is in line with the direction of market-oriented reform, and also conforms to the trend of decentralization and decentralization of foreign exchange management." Zhao Qingming said.

In recent years, China has always adhered to the direction of market-oriented reform in foreign exchange management and paid attention to the decisive role of market mechanism. Yi Gang, vice president of the people's Bank of China and director general of the State Administration of foreign exchange, made a summary of this earlier this year. Yi Gang said: "in the reform, we take the initiative to adjust the foreign exchange management measures which do not conform to the market operation rules, and try to avoid increasing the cost of operation and management of the main body of the market. For example, we should abolish the mandatory system of foreign exchange settlement and sale, carry out the reform of the verification system of trade in goods, allow enterprises to export their earnings outside the country, steadily push forward the convertibility of Renminbi capital items, accelerate the improvement of institutional investors at home and abroad on the basis of the basic convertibility of direct investment, vigorously foster and develop the foreign exchange market, consolidate the infrastructure of foreign exchange market, perfect market trading rules, enrich the main body and varieties of foreign exchange market, and improve the self clearing ability of foreign exchange market, and so on. The above reform measures conform to the objective needs of economic development, meet the expectations of the majority of market players, and get positive evaluations from various market participants.

"Cancel this time. dollar The management of listing and selling spreads helps to further release the enthusiasm and vitality of participants in the foreign exchange market. The above ICBC market analysts said.