People's Bank of China, Circular on Issues Relevant to the Launch of Swap Transactions Between Renminbi and Foreign Currencies in the Interbank Foreign Exchange Market

中国人民银行关于在银行间外汇市场开办人民币外汇货币掉期业务有关问题的通知

September 02, 2007 | BY

clpstaff &clp articles &

PBOC launches swaps between renminbi and foreign currencies.

Clp Reference: 3610/07.08.17 Promulgated: 2007-08-17 Effective: 2007-08-17

Issued: August 17 2007
Effective: As of date of issuance

Applicability: The phrase "swap between renminbi and a foreign currency" refers to a transaction agreement on the exchange of the renminbi principal and foreign currency principal of a specified amount within a specified period of time and the periodic exchange of the interests derived from both currencies (Article 1).

Main Contents: Swaps between renminbi principal and foreign currency principal shall be conducted in the following ways:

(1) the two parties conduct a swap of the renminbi principal and foreign currency principal according to the specified exchange rate on the effective date of the agreement, and make a reverse swap of the principal at the same rate and of the same amount on the expiration date of the agreement; and

(2) other ways as specified by the People's Bank of China and State Administration of Foreign Exchange.

The swap of interest means that both parties pay the amount of interest calculated in the target currency to the other party periodically. The interest may be calculated at a fixed rate or a floating rate (Article 1).

For the time being, currency swap transactions of renminbi against five currencies, namely US dollar, Euro, Japanese yen, Hong Kong dollar and pound sterling, may be conducted in the interbank foreign exchange market (Article 2). Domestic institutions with the membership of the interbank forward foreign exchange market may engage in swap transactions between renminbi and foreign currencies in the interbank foreign exchange market (Article 3). Swaps between renminbi and foreign currencies shall require record filing with the State Administration of Foreign Exchange (Article 4).

clp reference:3610/07.08.17promulgated:2007-08-17effective:2007-08-17

This premium content is reserved for
China Law & Practice Subscribers.

  • A database of over 3,000 essential documents including key PRC legislation translated into English
  • A choice of newsletters to alert you to changes affecting your business including sector specific updates
  • Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
For enterprise-wide or corporate enquiries, please contact our experienced Sales Professionals at +44 (0)203 868 7546 or [email protected]