On April 19, Wang Zhaowen, spokesperson of BOC, announced to the media, “After being approved by the State Administration of Foreign Exchange, BOC had become the first bank that obtain the qualification to conduct RMB and foreign currency swap transaction in inter-bank foreign exchange market a few days before, henceforth, BOC could conduct swap transactions between RMB and foreign currencies for the purpose of hedging and position adjustment by itself.”
Wang Zhaowen introduced that in order to adapt to the demand of new situations of rapid development of domestic inter-bank market for foreign exchange derivative products, in particular the market for RMB derivative products, BOC is actively committed to developing and promoting foreign exchange and RMB derivative products, so as to better provide all the customers with comprehensive, high-quality and high-efficient services. In 1997, BOC became the sole pilot bank engaging in forward settlement and sale of foreign exchange in China, and could provide eight types of forward exchange settlement and sale products for exchanging foreign currencies for RMB within the scope allowed by the State foreign exchange policy. In September 2005, BOC became the first bank to provide swap services for customers.
In order to enable customers to effectively avoid exchange rate risk, BOC is developing innovative products and services in the market through specialized departments and teams to prompt customers about the exchange rate risks in domestic and overseas markets, and promoting financial products that could avoid risks and serve the customers wholeheartedly. Up to now, BOC has had 9-year experiences in forward settlement and sale of exchange, maintaining a market share of above 50%, and realized the maintenance of asset values with the purpose of avoiding exchange rate risk for customers. During this period, BOC established its good reputation among its customers and occupy a customer share of certain scale. In the meantime, BOC accumulated rich experiences in the areas of technical management, risk management and quotation, and gradually established and perfected the management rules and operational procedures for swap transactions. It is due to the multiple advantages the Bank has in the above fields that BOC took the lead among domestic banks in obtaining the qualification for conducting swap transactions between RMB and foreign currencies.
Wang Zhaowen pointed out emphatically that the launch of RMB and foreign currency swap service in the inter-bank market is of great significance to the development and growth of domestic market for RMB and foreign currency derivative products. First, it is beneficial to standardizing and improving the whole swap market; second, it is conducive to the development of derivative products; third, it is helpful for financial institutions to strengthen liquidity management of local and foreign currency fund; fourth, it is capable of accelerating the pace of market-oriented reform in terms of exchange rate and interest rate; fifth, it could help customers to avoid exchange rate risk.
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