The central bank is planning on combining China's traditional foreign exchange trading system with a new system initiated last year by the end of 2006, the official China Securities Journal said on Saturday.
An integrated system would be the latest in a series of reforms to increase market efficiency and monitoring, the newspaper said.
The new system was launched a year ago and allows domestic trading in eight foreign currency pairs, a step towards a market-based environment by allowing home-grown lenders to trade foreign currencies, but is separate from yuan trading.
The country's decade-old interbank market, the China Foreign Exchange Trade System (CFETS), currently trades just four currency pairs - the yuan against the euro, yen, Hong Kong dollar and US dollar. A merging of the two systems would also allow trading in swaps and futures as well as spot trading of the yuan against other currencies, said the journal.
China is speeding up capital market reforms to prepare firms and banks for increased risks after revaluing the yuan by 2.1 percent to the dollar and abandoning an 11-year-old dollar peg for a managed float linked to a basket of currencies last July. It launched onshore foreign exchange forwards in the yuan a month later, and also kicked off over-the-counter trading for the yuan and started a market-making system in January.
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