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China aims to expand forex market, unify onshore and offshore yuan rates
[BEIJING] China will take steps to develop the sophistication of its currency trading systems and to promote the unification of yuan exchange rates on onshore and offshore markets, the foreign exchange regulator said on Thursday.
"We will continue to push forward deepening and opening of the foreign exchange market, including enriching trading products, expanding market players, promoting market opening, and improving infrastructure," said Wang Chunying, spokeswoman for the State Administration of Foreign Exchange (Safe).
She told a news conference the regulator will implement various measures, including developing foreign exchange derivatives, to help domestic firms to hedge currency risks.
"We hope to promote unified renminbi exchange rates on domestic and overseas markets through such measures."
She made these comments as capital outflows from China continued to stabilise in March, with Safe data showing net foreign exchange sales by commercial banks up slightly at US$36.4 billion in March from US$33.9 billion in February, but considerably lower than January's net sales of US$54.4 billion.
Net foreign exchange sales by commercial banks totalled US$124.8 billion in the first three months of 2016.
"Recent capital outflows have eased significantly from the start the year, although there was some volatility," Ms Wang told a news conference on Thursday.
China's central bank sold a net US$22.4 billion worth of foreign exchange in March, down from US$35.3 billion in February, earlier data showed, signalling fewer interventions to support the yuan as capital outflows eased.
Ms Wang said China would be able to cope with the impact from the US Federal Reserve's rate-hiking policy normalisation, when it happened.
She noted that China's main economic indicators had shown positive changes as the yuan stabilised.
China was likely to maintain a current-account surplus and ample foreign exchange reserves, while Safe would continue to crack down on illegal foreign exchange activities.