What’s new: A working paper (link in Chinese) published by the People’s Bank of China (PBOC) on Tuesday has called for the establishment of an onshore futures market for the yuan at an appropriate time.
The market will aid in the pricing of the yuan’s exchange rate, China’s pricing power over the exchange rate, and the internationalization of the currency, PBOC researchers Lei Yao and Han Xintao wrote.
The context: Yuan futures products allow companies to better manage exchange rate risks.
Currently, there is no yuan futures market on the Chinese mainland as regulators have long been worried about speculation that could pose risks to its financial system. There are such markets overseas, including in the U.S., Singapore, Hong Kong and Taiwan.
Related: In Depth: What’s Next for the Yuan After Crushing the Dollar for Six Months
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)
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