New forex management rule a big step forward

The revised version of the rule on foreign exchange management was released on August 6 and became effective immediately.

The new rule is a significant progress in China's scheme of managing foreign exchange because it has laid a foundation for free exchange of renminbi in the future. Although the new stipulation does not mean liberating the capital account, it has taken effective measures to facilitate the scheme of forming the exchange rate as well as the cross-border capital flows.

The rule on foreign exchange management was launched on January 29, 1996 and revised on January 14, 1997 for the first time. It played an important role in balancing China's international payment and controlling the country's financial risks.