The formation of the inter-bank foreign exchange market floating range management, banking system arrangement and bank settlement and sale of foreign exchange turnover position management, and these links are the key content of the arrangement.
Our COUNTRY HAS BEEN IMPLEMENTING “FOUNDATION WITH MARKET SUPPLY AND DEMAND, SINGLE, FLOATING RATE SYSTEM THAT HAS MANAGED”.
This system is embodied in the formation process of bank foreign exchange rates: the central parity of several major currencies such as the US dollar and the Japanese yen is obtained by weighted average of the transaction prices in the inter-bank foreign exchange market, which reflects the “market supply and demand as the basis”;
The weighted average transaction price is the only benchmark exchange rate in China, which reflects the “single” attribute.
In order to balance the supply and demand of foreign exchange and keep the exchange rate basically stable, the central bank often needs to intervene in the market, so it is “managed”.
However, the exchange rate in the interbank foreign exchange trading market and between customers and banks has a certain range of fluctuation, indicating that the exchange rate is not completely fixed, but exists a certain range of “floating”.
