Chaka
11-25-2005, 09:33 AM
http://news.yahoo.com/s/ap/20051125/ap_on_bi_ge/china_currency
Analysts said that it wasn't clear exactly what mechanism the central bank was using in its swaps transactions, but said it could be selling dollars and buying yuan on the spot market, and a year later could reverse the deal at the set rate.
That would have the effect of removing yuan from the money market. At the same time, the central bank could use the swap rate to signal its expectations about how fast it expects the yuan's value to rise, they said.
Late Thursday, China's State Administration for Foreign Exchange announced it would also introduce a new currency trading system allowing interbank market members to trade directly with each other. It also invited qualified members to apply to become market makers for yuan spot trading
(once again another currency related announcement on a Thursday)
Analysts said that it wasn't clear exactly what mechanism the central bank was using in its swaps transactions, but said it could be selling dollars and buying yuan on the spot market, and a year later could reverse the deal at the set rate.
That would have the effect of removing yuan from the money market. At the same time, the central bank could use the swap rate to signal its expectations about how fast it expects the yuan's value to rise, they said.
Late Thursday, China's State Administration for Foreign Exchange announced it would also introduce a new currency trading system allowing interbank market members to trade directly with each other. It also invited qualified members to apply to become market makers for yuan spot trading
(once again another currency related announcement on a Thursday)