Home>News Center>China
       
 

China takes another step towards flexible yuan
(Reuters)
Updated: 2006-01-04 19:54

China took another step towards currency flexibility on Wednesday by letting banks set its daily opening foreign-exchange rate, a change that might allow the yuan to move much faster than previously possible.

The new system, the latest in a long line of policies aimed at gradually freeing up the yuan, accompanied the introduction of open over-the-counter trading that will eventually replace the current system of anonymous and automatic order matching.

The changes, announced late on Tuesday, went into operation on Wednesday.

The yuan remains tied to a 0.3 percent range on either side of a daily mid rate against the dollar.

But whereas the mid rate has until now been the previous day's close, allowing only very slow movement, it will now be the average quote of market makers -- theoretically allowing a rise at the opening of trade each day.

"The old system was effectively a crawling system that limited day-to-day movement within 0.3 percent," Jun Ma, Deutsche Bank's Greater China chief economist, said in a research note.

"This change theoretically allows a very different central parity rate from the previous day's closing price."

But maybe only theoretically.
Page: 12



Ticket to ride
Giant pandas to land in Taiwan in June
Sewage leak creates hole in city road
  Today's Top News     Top China News
 

China reforms forex rate forming mechanism

 

   
 

Telephone subscribers to top 820m

 

   
 

Migrant dads return home suspicious

 

   
 

Green boost for Beijing in blueprint

 

   
 

Waterworks resumes supplies after spill

 

   
 

Bird flu outbreak reported in Sichuan

 

   
  China reforms forex rate forming mechanism
   
  Bird flu outbreak reported in Sichuan
   
  Green boost for Beijing in blueprint
   
  Cold front brings freezing fog, transport problems
   
  China commentator urges tougher line against Japan
   
  Telephone subscribers to top 820m
   
 
  Go to Another Section  
 
 
  Story Tools  
   
  News Talk  
  It is time to prepare for Beijing - 2008  
Manufacturers, Exporters, Wholesalers - Global trade starts here.
Advertisement