The People's Bank of China is an integral part of the State Council, and the State Administration of Foreign Exchange is the national administrative agency managed by various ministries and commissions in the State Council. Safe is managed by the central bank, and its director is concurrently the deputy governor of the central bank. China Foreign Exchange Trading Center is an institution directly under the head office of the People's Bank of China. The relationship between the three:
From the perspective of supervision function, the central bank conducts overall supervision at the macro level, and the foreign exchange trading center is responsible for the exploration and daily monitoring of the exchange rate formation mechanism, providing the inter-bank foreign exchange trading market; The State Administration of Foreign Exchange is responsible for the supervision and management of international payments and foreign exchange reserves. The three complement each other.
1. foreign exchange quotation
China's RMB exchange rate quotation mechanism is usually decided by the central bank. At present, the RMB has a managed floating exchange rate mechanism, so the exchange rate level is not only affected by market supply and demand, but also regulated.
2065438+On June 24th, 2006, the self-discipline mechanism of foreign exchange market was established in Shanghai. It is a market self-discipline coordination mechanism composed of members of the inter-bank foreign exchange market, and its purpose is to conduct self-discipline management on the quotation of the central parity of RMB exchange rate and the trading behavior in the inter-bank market and the counter market of banks. Under the foreign exchange self-discipline mechanism, there is an exchange rate working group, which is mainly responsible for standardizing the quotation of RMB exchange rate.
After the establishment of the self-discipline mechanism, two major changes have taken place in the formation mechanism of the central parity of RMB. The first time occurred in February, 20 17, and the self-discipline mechanism adjusted the reference period of the central parity of a basket of currencies from 24 hours before the quotation to 15 hours after the closing of the previous day to avoid the repeated reflection of the central parity on the daily change of the US dollar exchange rate the next day. Second, when faced with the risk of exchange rate overshoot, the exchange rate working group of the self-regulatory mechanism suggested that the middle price quotation model should be adjusted from the original "closing price+exchange rate change of a basket of currencies" to "closing price+exchange rate change of a basket of currencies+countercyclical factor". The proposal was passed by the core members of the self-regulatory mechanism and formally implemented by the secretariat of the self-regulatory mechanism of the foreign exchange market at the end of May 20 17. At present, the startup and suspension of countercyclical factors are uniformly announced by the secretariat of the self-regulatory mechanism. On 20 18 10, the secretariat of the self-regulatory mechanism announced that the countercyclical factor returned to neutrality. After a lapse of half a year, at the end of August, 20 18, the secretariat announced that it would restart the countercyclical factor.
2. Foreign exchange market
China's foreign exchange market can be divided into two parts: the inter-bank market and the bank-to-customer market. The organizer of the inter-bank market is the foreign exchange trading center, while the bank-to-customer market is spontaneously formed by banks with relevant qualifications. The inter-bank foreign exchange market is a market for foreign exchange transactions between institutions, including RMB foreign exchange market, foreign currency pair market, foreign currency borrowing market and related derivatives market.
The inter-bank foreign exchange market implements member management and market maker system, and only when you become a member can you be eligible to participate in transactions. Members of the inter-bank foreign exchange market need to apply to the foreign exchange trading center, and the qualification of market makers needs to apply to the foreign exchange bureau (except foreign currency of market makers).
The central bank's monetary policy implementation report in the second quarter shows that by the end of June 20 18, there were 667 members in the inter-bank foreign exchange market, 203 members in the forward market, 199, 167 and10/9 members in the currency swap market, and 30 members in the spot market. Wind data shows that as of August 3 1 2,065,438, there are 33 spot market makers in RMB and foreign exchange and 30 market makers in forward swap market.
There are 6 spot RMB and foreign exchange market makers, 65,438+00 forward swap market makers and 65,438+06 foreign currency market makers.
As the central bank, China People's Bank is also an important participant in the inter-bank foreign exchange market. According to the needs of monetary policy, you can enter the market as an ordinary member at the right time, buy and sell foreign exchange in the foreign exchange market, adjust foreign exchange supply and demand, and stabilize foreign exchange market prices.
The market access qualification of banks belongs to SAFE. In 200 1 year, SAFE formulated and implemented the Interim Measures for the Administration of Settlement and Sale of Foreign Exchange by Designated Foreign Exchange Banks, which clarified the market access and exit of settlement and sale of foreign exchange, and standardized the whole process management of bank settlement and sale of foreign exchange. In 2005, SAFE announced the expansion of bank forward settlement and sale of foreign exchange, and introduced RMB and foreign currency swap business. As long as the bank has the qualification of spot settlement and sale of foreign exchange and derivatives trading, it can engage in forward settlement and sale of foreign exchange after filing, provided that no major foreign exchange violations have occurred in the operation of settlement and sale of foreign exchange in the past two years. Banks that are allowed to handle forward settlement and sale of foreign exchange for more than 6 months are allowed to handle RMB and foreign currency swap business without interest rate swap for customers after filing with the State Administration of Foreign Exchange. By the end of 20 17, there were 489 banks with spot foreign exchange settlement and sale business, 90 banks with forward and swap business and 58 banks with option business.
3. Foreign exchange management
Foreign exchange management is a broad concept, including but not limited to balance of payments management, foreign exchange reserve management and supervision and management involving foreign exchange-related departments and institutions. The functional department in charge of foreign exchange in China is the State Administration of Foreign Exchange.
Balance of payments management can be divided into current account management and capital account management. China achieved full convertibility of current account as early as 1996. At present, the management of current projects is based on the principle of "real needs". For example, the state does not restrict international payment under trade, but the foreign exchange receipts and payments of domestic institutions should have a real and legal trade background, which is consistent with the import and export of goods. The state does not restrict the international payment under the service trade, but emphasizes that the foreign exchange receipts and payments of service trade should have a real and legal trading basis.
The process of China's capital account convertibility was marked by its accession to the WTO in 2000. Before that, it was under strict supervision under the influence of the Asian financial crisis in 1998. After that, the convertibility of capital account was gradually liberalized, which was in line with international standards. The capital account convertibility reform is carried out from the aspects of foreign creditor's rights and debts, direct investment, securities investment and property transfer. The first 10 year after China's entry into WTO is the accelerated period of capital account convertibility, and the focus of reform is on direct investment and foreign creditor's rights and debts management. For example, in 2005, the pilot reform of foreign exchange management of foreign direct investment was expanded to the whole country, the scale limit of foreign exchange purchase quota for overseas investment was abolished in 2006, and the management of foreign exchange fund source audit and fund remittance approval for overseas investment was adjusted to registration management in 2009, and the exchange link was basically no longer restricted. From 20 14, the reform of direct investment entered a stage of deepening and refining, and securities investment measures were accelerated. Typical representative events include the implementation of mutual recognition of funds between the mainland and Hong Kong in 20 15, the promotion of the opening of domestic commodity futures market in 20 17 and the launch of "Bond Pass".
In addition, the State Administration of Foreign Exchange also undertakes some functions of market access for foreign exchange business, including market access for bank settlement and sale of foreign exchange business and foreign exchange business of securities and insurance institutions. At the end of 20 14, 95 securities institutions were qualified to engage in foreign exchange business. In the same year, SAFE approved two securities institutions to carry out foreign exchange settlement and sale business on a pilot basis (Guotai Junan and harvest fund). 20 17 Strengthen the verification of the true compliance of overseas direct investment of securities institutions, and at the same time implement negative list management on the use of funds, and support securities institutions to carry out acquisition (merger) activities related to their main business on the premise of ensuring true compliance. At the end of the same year, a total of 143 insurance institutions were qualified to engage in foreign exchange business.
Generally speaking, the central bank, the administration of foreign exchange and the foreign exchange trading center have their own functions and clear division of labor. The central bank is responsible for the overall situation, and the administration of foreign exchange is responsible for the specific management of foreign exchange affairs. The foreign exchange trading center is a trading institution in the inter-bank foreign exchange market. In addition, the three complement each other. For example, although the exchange rate quotation mechanism is decided by the central bank, the specific exploration is the responsibility of the foreign exchange market self-discipline mechanism of the foreign exchange trading center. At the same time, the central bank will also regulate foreign exchange supply and demand through the platform of foreign exchange trading center.