Good day traders, if you’re planning to trade the Chinese currency, here’s what you need to be mindful of.
Chinese authorities are looking forward to building a competitive and accessible FX market. The underlying principle of this new market ‘product’ is an adaptable exchange rate scheme to balance global payments and keep the effect of cash outflows under control. Fang Shangpu, SAFE deputy chief stated in an interview on Thursday that the regulatory body would produce a negative list regarding prudential evaluation. Forex conversion curbs for micro areas (i.e.: trading by entities and/or individuals) would slowly but surely be eliminated. He also mentioned that the financial watchdog will increase inspections on legitimacy and adherence of banks’ forex transactions. China has committed to launch a market-centred exchange rate reform that will allow the yuan to have bidirectional flexibility despite the currency’s tight regulated statute.
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