China will allow banks to trade currency swaps from March 1 as Beijing pushes for further internationalization of the renminbi, the Wall Street Journal reported. The State Administration of Foreign Exchange (SAFE) said banks that have been eligible to issue foreign exchange swaps for at least one year will be able to issue currency swaps to corporate clients without additional approval from the forex regulator. SAFE said interest on currency swaps can be decided by the two parties so long as they are within the central bank’s interest rate guidelines. The new rules are meant to simplify market-entry approval procedures and allow banks more flexibility as the market for financial derivatives grows.
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