FX:
Chinese regulators should intervene less in the renminbi’s exchange rate, China Finance Forum 40 suggested in a report on September 23. The think tank said while China has made efforts to introduce more two-way volatility in the renminbi, the country’s FX policy still lacks flexibility.
The report said regulators should step back from intervening in the exchange rate on a daily basis through measures such as the counter-cyclical factor introduced in May, according to local media.
China Finance Forum 40 made a series of recommendations to policymakers, including putting the State Council’s Financial Stability and Development Commission in charge of coordinating financial reforms, increasing the role of market forces in deciding the renminbi’s exchange rate and speeding up renminbi internationalisation.
Yin Yong, deputy governor of the People’s Bank of China, is a member of China Finance Forum 40.
The China Foreign Exchange Trade System (CFETS) has permitted its members to borrow and lend in sterling and Canadian dollars through CFETS’s new electronic trading system, CFETS FX2017, effective September 25. The interest rate bearing periods for the two currencies are 365 and 360 days, respectively.
The PBoC’s renminbi fix against the dollar was set at 6.5945 this morning, 84bp weaker from Friday. The NEX CNH benchmark came in at 6.5807 at 4.31pm on Friday, firmer from 6.5920 on Thursday.
The dollar index closed at 92.171 on Friday, down 0.1% from Thursday, according to Bloomberg. The Thomson Reuters CNY reference index closed at 95.30 on Sunday, 0.07% lower from its previous close.
The trade-weighted index by CFETS closed at 94.54 on September 22, down 0.7% from the previous week, with the BIS basket and special drawing rights basket at 95.36 and 95.11, down 0.26% and 0.6%, respectively.
Commodities:
China should open up its agricultural commodity futures market to foreign investors, Fang Xinghai, deputy chair of China Securities Regulatory Commission, said on September 22. Fang noted that China, as the world’s largest consumer and a sizable producer of agricultural products, should have a greater impact on the pricing of agricultural products, and argued that opening up the domestic futures market could help China achieve that goal.
“We will hold on to the fundamental principles of serving the real economy and our country’s strategy and … actively promote the opening up of agricultural commodity futures market,” Fang said.
Payments:
Jiangmen Xinhui Rural Commercial Bank and three other financial institutions have been approved as indirect participants of CIPS, effective September 22. There are now 632 institutions that are indirect participants in CIPS.
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