On May 26, the Ministry of Commerce, the People’s Bank of China and the State Administration of Foreign Exchange issued a notice on supporting foreign economic and trade enterprises to improve their exchange rate risk management capabilities.
The notice proposes to improve exchange rate hedging products and services, and further enhance the convenience of RMB cross-border settlement. The branch offices of the People’s Bank of China and the foreign exchange bureau in various places shall encourage banks to provide products and services that meet market demands on the basis of the “Three Principles of Business Development” and “implement policies tailored to the characteristics of enterprises”. Banks are encouraged to continuously improve the service capabilities of primary institutions for RMB against foreign exchange derivatives, innovate products and service channels, and support small and medium-sized banks to cooperate in handling RMB against foreign exchange derivatives services, so as to meet the diversified exchange rate hedging needs of enterprises. Further facilitate enterprises to use RMB in cross-border trade and investment, and encourage enterprises to avoid exchange rate risks through RMB cross-border pricing and settlement.