Banks allowed to set own exchange rates
Print Edition
CHINA unveiled another modest easing of its currency controls yesterday, saying banks will be allowed to set their own exchange rates in dealings with customers.
The change adds to a series of moves aimed at making the government-controlled financial system more market-oriented and efficient.
Under the rule change, banks allowed to handle foreign currency “can set exchange rates for the yuan by themselves for customers based on market demand and price-setting ability,” the Chinese foreign currency regulator said in a statement.
Until now, Beijing has set an exchange rate for the yuan each day and then allowed it to fluctuate in a band against the US dollar and other currencies. In March, that band was widened to 2 percent.
Under the latest change, banks that make a profit by buying foreign currencies at one price and selling at another could offer some customers a better deal by narrowing the margin between those two levels.
Premier Li Keqiang promised in an annual policy speech in March to give market forces a “decisive role” in allocating credit and other resources in the state-dominated economy.
Chinese leaders say they plan eventually to let the yuan float freely, but analysts say that might be decades away.
Allowing the yuan to rise in value would increase the buying power of Chinese households, helping achieve the government’s goal of a more sustainable economic growth based on domestic consumption instead of trade and investment.
A stronger yuan also could help suppress pressure for consumer prices to rise by making imports cheaper.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
