RSSNewsletterSiteMapFeedback

Home · Weather · Forum · Learning Chinese · Jobs · Shopping
Search This Site
China | International | Business | Government | Environment | Olympics/Sports | Travel/Living in China | Culture/Entertainment | Books & Magazines | Health
Home / Business / Finance Tools: Save | Print | E-mail | Most Read | Comment
China will start swap trades soon
Adjust font size:

China will expand trading of interest-rate swaps next month to accelerate the development of derivatives and help companies and financial institutions hedge risks, the central bank said.

 

Qualified members of the nation's interbank bond market will be allowed to trade yuan-denominated interest-rate swaps, the People's Bank of China said on its Website at the weekend.

 

The plan will be effective 30 days from January 18, the bank said.

 

"This shows the central bank is determined to promote financial derivatives trading in the interbank market," said Zhang Lan, a fixed-income analyst with Bank of Nanjing Co, partly owned by BNP Paribas SA.

 

China first allowed commercial banks to trade interest-rate swaps under a pilot program in early 2006, said Bloomberg News.

 

Such transactions enable parties to exchange fixed-rate payments with floating-rate payments and vice versa to hedge risk.

 

The Association of Financial Market Institutional Investors, which is under the central bank's supervision, asked dealers to sign a master agreement in December to speed up the development of derivatives trading.

 

"So far the more experienced international banks have been more active than local banks and they often trade on behalf of their customers," Zhang said.

 

The Chinese central bank has given commercial lenders more leeway over the interest rates they offer and is developing the bond market, part of efforts to increase the market's role in directing credit and its effect on the economy.

 

Institutions that borrow at a floating rate and invest in assets that pay a fixed rate lose money when there is an increase in interest rates.

 

(Shanghai Daily January 28, 2008)

 

Tools: Save | Print | E-mail | Most Read

Comment
Username   Password   Anonymous
 
China Archives
Related >>
- CDB & CEB Signs Master Agreement on Derivatives
- First RMB Interest Rate Swap Transaction Clinched
Most Viewed >>
-January CPI expected to rise 6.5%
-Lucrative Yuanmingyuan duplication scheme
-Lenovo to sell mobile unit for US$100m
-Tight monetary policy must not be eased
-Emergency coal shipped to power plants in S China

May 15-17, Shanghai Women's Forum Asia
Dec. 12-13 Beijing China-US Strategic Economic Dialogue
Nov. 27-28 Beijing China-EU Summit

- Output of Major Industrial Products
- Investment by Various Sectors
- Foreign Direct Investment by Country or Region
- National Price Index
- Value of Major Commodity Import
- Money Supply
- Exchange Rate and Foreign Exchange Reserve
- What does the China-Pakistan Free Trade Agreement cover?
- How to Set up a Foreign Capital Enterprise in China?
- How Does the VAT Works in China?
- How Much RMB or Foreign Currency Can Be Physically Carried Out of or Into China?
- What Is the Electrical Fitting in China?
SiteMap | About Us | RSS | Newsletter | Feedback

Copyright © China.org.cn. All Rights Reserved E-mail: webmaster@china.org.cn Tel: 86-10-88828000 京ICP证 040089号