Foreign Investors to Get More Forex Hedging Tools, China's SAFE Says
Yicai Global
/SOURCE : yicai
Foreign Investors to Get More Forex Hedging Tools, China's SAFE Says

(Yicai Global) Jan. 14 -- Foreign investors will be given more channels through which to access derivatives on China's interbank bond market, helping them to hedge against foreign exchange risks, the State Administration of Foreign Exchange said yesterday.

From Feb. 1, overseas investors will be able to hedge on the interbank forex market through prime brokerage services offered by large domestic financial institutions. This mature trading model will be able to offer them better terms, a SAFE official told Yicai Global.

They will also be able to conduct over-the-counter transactions through three Chinese financial organizations and will be allowed to directly enter the interbank forex market by becoming members of the China Foreign Exchange Trade Center.

"This is an innovative exploration of the domestic forex market," the official said. It will help manage corresponding risks under bond investment and will enrich and optimize trading models in the interbank forex markets, he added.

These new avenues are an extension of the administration's 2017 policies. Previously, only settlement agents could provide forex hedging services. 

Editor: Kim Taylor

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Keywords: Derivatives Trade , Debt Market , Foreign Exchange Market , Foreign institute Investor , SAFE