OREANDA-NEWS. August 20, 2012. Along with the development of China’s foreign exchange market, to enhance the flexibility of RMB exchange rate in both directions, the PBC released the PBC Announcement ( [2012] No.4) , and announced to widen the floating band of RMB’s trading prices against the US dollar on the interbank spot foreign exchange market from 0.5 percent to 1 percent, reported the press-centre of Bank of China. 

On April 16,the PBC reported to the Finance and Economy Committee of the National People’s Congress on implementation of monetary policy in the first quarter of 2012.

On April 23,the PBC signed agreements with the International Bank for Reconstruction and Development (IBRD) and the International Development Associations (IDA) respectively for the PBC to invest in China’s interbank bond market on behalf of the two agencies.

On May 10,the China Monetary Policy Report for Q1 2012 was released.

On May 12,the PBC decided to cut the RMB deposit reserve requirement ratio of deposit-taking financial institutions by 0.5 percentage points, effectively from May 18, 2012.

On May 29, with the authorization of the PBC, the China Foreign Exchange Trade System (CFETS) announced to improve the trading mode between the RMB and the Japanese Yen (CNY/JPY) and launch the direct trading between the two currencies, effectively from June 1, 2012.

On May 31,the issuance of short-term bills of securities firms was resumed.

On June 5, the PBC, jointly with the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, the State Administration of Taxation, and the China Banking Regulatory Commission, issued the Letter on the Focused-supervision List of Enterprises That Conduct RMB Settlement for Merchandise Export (PBC General Administration Department Document [2012] No. 381). By then, all enterprises that have export licenses can conduct RMB settlement for merchandise export according to the law.

On June 7,the PBC decided to cut RMB benchmark deposit and loan interest rates of financial institutions as of June 8, 2012. The one-year RMB benchmark deposit rate was cut from 3.5 percent to 3.25 percent, down 0.25 percentage points. The one-year benchmark loan rate was cut from 6.56 percent to 6.31 percent, down 0.25 percentage points. Adjustments are made correspondingly to benchmark interest rates on deposits and loans of other maturities and to deposit and loan interest rates on personal housing provident fund. As of the same day, the floating range of deposit and loan rates of financial institutions was adjusted. The upper limit of the floating range for deposit interest rates will be 1.1 times the benchmark interest rate, and the lower limit of the floating range for loan interest rates will be 0.8 times the benchmark interest rate.

On June 8,the Regional Financial Sector Performance Report for 2011 was released.

On June 26,the PBC signed a bilateral local currency swap agreement with the National Bank of Ukraine. The agreed amount was 15 billion yuan or 19 billion hryvnia. The effective period of the arrangement will be three years and can be extended upon mutual consent.

On June 27,the Monetary Policy Committee of the PBC convened its second regular quarterly meeting in 2012.