SHANGHAI (Reuters) - China is planning to allow qualified foreign institutions to borrow and lend on the interbank foreign currency market to help meet their financing needs, the China Foreign Exchange Trade System (CFETS) said in an online statement on Thursday.
The latest move is an incremental step to further open up the country’s financial markets. China’s central bank has already allowed some foreign institutions to participate in the onshore interbank forex market, where they may trade spot products, forwards, swaps, FX swaps and options.
The People’s Bank of China said late last year that it would allow more overseas banks to enter the market. And it also extended onshore yuan trading hours to overlap with European trading hours, as Beijing moves towards internationalizing its currency.
Reporting By Winni Zhou and Nathaniel Taplin; Editing by Simon Cameron-Moore