China to let firms offset fx swap positions directly on trial basis

[SHANGHAI] Companies in China will be allowed to offset their currency swap positions directly with other counterparties on a trial basis, the country's foreign exchange market operator announced on Friday, in a minor reform to currency trading.

Only designated market markers for swaps and forwards can conduct the offset trades, the China Foreign Exchange Trading System (CFETS) said in a statement. CFETS is a unit of the Chinese central bank.

The mutual liquidation of swap positions appear to be aimed at allowing banks and other financial institutions to conduct more derivative trades as their current business scale is restricted by official limits.

REUTERS