What is the dual exchange rate system

Under the dual-track system, companies are divided into two parts, one part of which must be turned over to the state at the lower official exchange rate, and the other part which can be sold at the adjusted market rate or can import profitable goods according to market supply and demand signals.

In order to strengthen the economic accounting and meet the needs of the reform of the foreign trade system, The State Council decided to implement two systems from 1981, that is, to set the intra-trade settlement price separately, and to keep the official rate as the non-trade foreign exchange settlement price.

This is the so-called “dual exchange rate system” or “double track exchange rate system”.