The CPI of RMB Settlement Rose by 1.65 Times In the Second Quarter

　　Report on China’s Monetary Policy of the Second Quarter, which was released recently by Chinese central bank, indicated that interbank foreign exchange market has been operating smoothly ever since the promotion of the foreign exchange reform. The report also stated that the number and the amount of international trade settlement in RMB experienced a dramatic increase in June owing to the expension of the international trade settlement selected points.

　　Foreign Exchange Reform Receives Stable Responses from Foreign Exchange Market

　　Chinese central bank pointed out that the RMB exchange rate has been experiencing a modest rise after the RMB exchange rate reform came into performance one month ago, which suggests the essential effects of the market demand and supply.

　　Meanwhile, the trend of RMB exchange rate represents the requisition of ‘a basket of currencies’. The middle price of exchange rate of RMB against the US dollars maintained the same level on June 21st with that on June 20th. The trend of exchange rate in the rest of the trading days were similar to that against the US dollars and other main currencies.

　　In addition, RMB exchange rate appears manifest two-way floating features. The middle price of RMB against the US dollar has experienced parity for one day, appreciation for 14 days and devaluation for 9 days since the exchange rate reform came into effect one month ago. The exchange rate has became more flexible. The average fluctuation rate of interbank exchange market is 101 points which is 1.3 times higher than that from the beginning of the exchange rate reform came into effect in 2005 to the end of July, 2008, known as 77 points.

　　Further pomotion of exchange rate reform receives mild responses from enterprises and individuals. The foreign exchange purchase and sale business in bank counters have not experienced any abnormal fluctuations. Enterprises have adopted foreign exchange hedging tools in order to evade risks. Thers will be an increase in the future signing volumn of the foreign exchange purchase and sale business in the bank counters.

　　Chinese central bank revealed that further pomotion of exchange rate is more beneficial than detrimental to the import and export trade as well as the job market. The government will be engaged in creating favourable conditions, guiding and assisting enterprises with accelerating their restructuring. The banking systems are also expected to improve their financial services and be of great service and support to the enterprises in coping with exchange rate risks. The central bank will also strengthen supervision and administration of short-term investment capital to ensure that large amounts of floating capital exert negative influence on domestic financial market.

　　As for the following work ahead, Chinese central bank claimed that they will continue advancing the development of the monetary market benchmark rate system and unceasingly enhancing scientific pricing ability as well as strengthening the function of regulation and control on price lever. In the meantime, they will also improve the formation of RMB exchange rate system and perfect various kinds of strategies to deal with foreign exchange rate risks.