China's foreign-exchange regulator, the central bank, allowed HSBC Holdings Plc, Citigroup Inc and 12 other banks to become members of the country's interbank foreign-exchange forwards market.
The Shanghai branches of HSBC, Citigroup, Standard Chartered Plc, Credit Suisse First Boston, Societe Generale SA, Deutsche Bank AG, ING Groep NV, Mizuho Financial Group Inc and the Guangzhou branch of Bank of Montreal became members of the interbank forwards market on August 24, the China Foreign Exchange Trading Center, a unit of the People's Bank of China, said on its website.
Chinese banks given membership at the same time are Industrial & Commercial Bank of China, the country's biggest lender, Bank of China, China Construction Bank, China International Trust & Investment Corp and Bank of Communications Ltd, the statement said.
Allowing the lenders to trade currency forwards is the latest in a series of steps China has taken to liberalize its foreign exchange market. The government abandoned a decade-old peg to the US dollar on July 21, allowing the yuan to rise by 2.1 percent and trade 0.3 percent on either side of a fixing rate set by the central bank each day.
Among other steps toward a more market-based yuan, the central bank of China raised limits on how much foreign currency companies can hold, increased the amount of yuan individuals can sell and let more than 130 domestic and foreign banks apply to trade yuan forward contracts in a bid to help them guard against swings in the yuan.