Timeline: China's Foreign Exchange Market - New York Times
Timeline: China's Foreign Exchange Market - New York Times
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July 21, 2005
Timeline: China's Foreign Exchange Market
By REUTERS
BEIJING, July 21 (Reuters) - China bowed to months of market and political pressure on Thursday by revaluing the yuan by 2.1 percent and abandoning the currency's decade-old peg against the dollar.
In a long-awaited move that it said would improve the running of the economy and give more play to market forces, the central bank said the yuan's value from now on would be linked to a basket of currencies of China's main trading partners.
Beijing had been under strong pressure from its trading partners, especially the United States, to abandon the yuan's peg of 8.28 per dollar, which they said undervalued the currency and handed Chinese exporters an unfair advantage on world markets.
The new rate, initially, will be 8.11 yuan per dollar, well short of the 10 percent revaluation that Washington had been seeking to head off protectionist pressure in Congress.
Following are key developments in China's forex market.
1988
China set up semi-official currency swap centres around the country to allow enterprises to trade the yuan at a rate that more closely reflected market demand.
1994
Jan. 1 - China unified its dual exchange rates by bringing the official and swap centre rates into line, officially devaluing the yuan by 33 percent overnight to 8.7 to the dollar as part of reforms to embrace a "socialist market economy."
April - China set up its first interbank currency market -- the Foreign Exchange Trade System -- in Shanghai, which traded the yuan under "managed float" regime. The central bank intervened in the market to keep the yuan stable.
1996
Dec. 1 - China allowed the yuan to be fully convertible under the current account.
1994-1996
The yuan strengthened steadily under the "managed float" regime from 8.7 to the dollar to around 8.28.
1997-1999
China won wide praises for keeping the yuan stable during the Asian financial crisis despite pressure to devalue. The yuan was boxed between 8.2770 and 8.2800 for about three years through frequent central bank intervention.
2000
April - The yuan was allowed to close slightly outside the firm end of the 30-basis point band and was later widened by another 10 points to 8.2760 to 8.2800 against the dollar.
2001
December - China joined the World Trade Organisation and pledged to adjust its currency regime gradually.
2002
March 28 - Central bank chief Dai Xianglong said China would study a proposal by the IMF to introduce a currency basket system instead of pegging the yuan to the dollar.
2003
Jan. 7 - New central bank governor Zhou Xiaochuan, in his first policy statement after his appointment in December 2002, pledged to keep monetary policy and the yuan stable.
Jan. 29 - Former White House economic adviser Lawrence Lindsey said Washington should tell China to get rid of its currency peg as it makes it hard for U.S. manufacturers to compete, marking the start of foreign pressure on China.
Dec. - China inject $45 billion in foreign exchange reserves into Bank of China and China Construction Bank to help them clean up balance sheets and prepare for stock listings.
2004
March 6 - Guo Shuqing, head of the State Administration of Foreign Exchange, said China's capital account may be mostly open within five to six years.
April - China let selected domestic firms keep up to half their forex earnings as part of steps to ease upward pressure on the yuan. Previously, companies could only retain 20 percent.
June 9 - SAFE said it planned to expand the tightly controlled forex market by allowing new instruments and more firms to trade.
Nov. 18 - The central bank raised interest rates on U.S. dollar deposits to cool a speculative rush to convert dollars into yuan in anticipation of a yuan revaluation.
Dec. 8 - Premier Wen Jiabao said that China would move gradually to a flexible currency regime but take into account the need for a more efficient financial system and the stability of its economy and those of its neighbours.
2005
July 21 - Revalues yuan by 2.1 percent and abandons the peg against the dollar. Links yuan to basket of currencies of main trading partners. The new rate, initially, is 8.11 yuan per dollar.
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--------------------------------------------------------------------------------
July 21, 2005
Timeline: China's Foreign Exchange Market
By REUTERS
BEIJING, July 21 (Reuters) - China bowed to months of market and political pressure on Thursday by revaluing the yuan by 2.1 percent and abandoning the currency's decade-old peg against the dollar.
In a long-awaited move that it said would improve the running of the economy and give more play to market forces, the central bank said the yuan's value from now on would be linked to a basket of currencies of China's main trading partners.
Beijing had been under strong pressure from its trading partners, especially the United States, to abandon the yuan's peg of 8.28 per dollar, which they said undervalued the currency and handed Chinese exporters an unfair advantage on world markets.
The new rate, initially, will be 8.11 yuan per dollar, well short of the 10 percent revaluation that Washington had been seeking to head off protectionist pressure in Congress.
Following are key developments in China's forex market.
1988
China set up semi-official currency swap centres around the country to allow enterprises to trade the yuan at a rate that more closely reflected market demand.
1994
Jan. 1 - China unified its dual exchange rates by bringing the official and swap centre rates into line, officially devaluing the yuan by 33 percent overnight to 8.7 to the dollar as part of reforms to embrace a "socialist market economy."
April - China set up its first interbank currency market -- the Foreign Exchange Trade System -- in Shanghai, which traded the yuan under "managed float" regime. The central bank intervened in the market to keep the yuan stable.
1996
Dec. 1 - China allowed the yuan to be fully convertible under the current account.
1994-1996
The yuan strengthened steadily under the "managed float" regime from 8.7 to the dollar to around 8.28.
1997-1999
China won wide praises for keeping the yuan stable during the Asian financial crisis despite pressure to devalue. The yuan was boxed between 8.2770 and 8.2800 for about three years through frequent central bank intervention.
2000
April - The yuan was allowed to close slightly outside the firm end of the 30-basis point band and was later widened by another 10 points to 8.2760 to 8.2800 against the dollar.
2001
December - China joined the World Trade Organisation and pledged to adjust its currency regime gradually.
2002
March 28 - Central bank chief Dai Xianglong said China would study a proposal by the IMF to introduce a currency basket system instead of pegging the yuan to the dollar.
2003
Jan. 7 - New central bank governor Zhou Xiaochuan, in his first policy statement after his appointment in December 2002, pledged to keep monetary policy and the yuan stable.
Jan. 29 - Former White House economic adviser Lawrence Lindsey said Washington should tell China to get rid of its currency peg as it makes it hard for U.S. manufacturers to compete, marking the start of foreign pressure on China.
Dec. - China inject $45 billion in foreign exchange reserves into Bank of China and China Construction Bank to help them clean up balance sheets and prepare for stock listings.
2004
March 6 - Guo Shuqing, head of the State Administration of Foreign Exchange, said China's capital account may be mostly open within five to six years.
April - China let selected domestic firms keep up to half their forex earnings as part of steps to ease upward pressure on the yuan. Previously, companies could only retain 20 percent.
June 9 - SAFE said it planned to expand the tightly controlled forex market by allowing new instruments and more firms to trade.
Nov. 18 - The central bank raised interest rates on U.S. dollar deposits to cool a speculative rush to convert dollars into yuan in anticipation of a yuan revaluation.
Dec. 8 - Premier Wen Jiabao said that China would move gradually to a flexible currency regime but take into account the need for a more efficient financial system and the stability of its economy and those of its neighbours.
2005
July 21 - Revalues yuan by 2.1 percent and abandons the peg against the dollar. Links yuan to basket of currencies of main trading partners. The new rate, initially, is 8.11 yuan per dollar.
Copyright 2005 Reuters Ltd. Home Privacy Policy Search Corrections XML Help Contact Us Work for Us Back to Top
posted by Eastlaw at Friday, July 22, 2005
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