Introduction
As one of the foreign exchange swap business, foreign currency to RMB swap is actually the combination of a spot deal and a forward deal of foreign currency to RMB. Specifically, commercial bank and the customer sign the swap agreement through mutual consultation, and agree on the spot foreign exchange rate and the value date as well as the forward foreign exchange rate and its value date respectively. The customer shall conduct the conversion between RMB and foreign exchange with the commercial bank in accordance with the agreed spot exchange rate and value date, and conduct the opposite conversion with the commercial bank in accordance with the agreed forward exchange rate and value date.
Features
Concerning the features of RMB and foreign currency swap business, the product can meet different demands of corporate customers in several aspects.
1. On the basis of RMB swap trading, by means of selling spot high-interest currency (higher than deposit interest) and buying forward high-interest currency, customers can realize the effective utilization of high-interest currency funds and gain higher interest income than time deposits, so as to guarantee and increment the value of foreign currency.
2. Through RMB swap trading, customers can improve the usage efficiency of home currency and foreign currency circulating funds. Exchange between home currency and foreign currency funds not only can solve the shortage of home currency or foreign currency liquidity funds, but also can fix the costs of currency exchange and avoid the exchange rate risk.
3. As the admittance qualification of QDII loosed, an increasing number of funds are seeking for overseas investment opportunities. Through RMB to foreign currency swap, customers can invest in various financial markets and financial products all over the world, and thus enrich the investment types, disperse the investment risks, and increase the investment returns.
4. The maturity date of a foreign exchange forward settlement and sale can be adjusted through RMB swap trading, so as to extend or advance the settlement date.
Currency
USD/RMB, HKD/RMB, EUR/RMB, JPY/RMB, GBP/RMB, CHF/RMB, AUD/RMB, CAD/RMB.
Term
The term of common RMB swap can be any period no more than one year. Upon maturity, customers can renew another swap transaction to extend the period. The spot price of the new transaction shall be subject to the market price on the trading day, and its corresponding profits and loss shall be settled.
Guarantee
When conducting forward foreign exchange settlement and sale, RMB and foreign currency swap, customers shall pay the security deposits or deduct credit line. The management of security deposits and credit line shall be carried out in accordance with relevant provisions in the Management Regulations of Fund Business in Domestic Branches of Bank of China.
Interest Rate
The interest rate of RMB swap business shall be in line with the inter-bank offered rate, and be adjusted concerning the market situations.
Target Customers
Domestic institutions and customers approved by State Administration of Foreign Exchange.
Application Qualifications
Foreign currency to RMB swap business is available to any income and expense under current account and capital account which conform to the following provisions.
1. For current accounts, foreign currency to RMB swap is available to any foreign exchange income and expense which are qualified for settlement and sale of exchange according to the Management Rules of Foreign Exchange Settlement, Sale and Payment. When settling the foreign currency to RMB swap business as prescribed by the contract, customers need to provide all the required valid certifications.
2. For capital accounts, foreign currency to RMB swap is available to the following aspects:
Repayment of foreign exchange loans of Bank of China;
Repayment of overseas loans registered through State Administration of Foreign Exchange;
Exchange revenue of overseas direct investment registered through State Administration of Foreign Exchange;
Principal income of foreign-invested enterprises registered through State Administration of Foreign Exchange;
Exchange revenue of overseas listing of domestic institutions registered through State Administration of Foreign Exchange;
Other exchange revenues approved by State Administration of Foreign Exchange.
3. In order to conduct the foreign currency to RMB swap business for the income and expense of current accounts and capital accounts, customers are required to provide valid certifications of the above income and expense transactions conforming to the management rules of foreign exchange. Customers' funds saved in the foreign exchange accounts (excluding "to-be-settled foreign exchange account", which shall be prescribed after the account reform by the State Administration of Foreign Exchange) under current accounts are suitable for the swap business. And the foreign exchange earnings upon maturity of contracts can be deposited in the foreign exchange account of the current account. For the specific expenditure purpose or use of the funds in foreign exchange accounts under the current account that are used for swap business, customers shall provide corresponding valid certifications.
Process
1. When applying to Bank of China for RMB and foreign exchange swap business, customers need to submit the application form and relevant certifications on RMB and foreign exchange swap;
2. As prescribed by related exchange management rules, Bank of China shall check the authenticity and compliance of the application form and corresponding certifications;
3. Upon approval, customers can inquire the quotations from the fund department;
4. Bank of China shall collect transaction security deposits or deduct the credit line, and sign with customers after reaching an agreement on price. Bank of China shall give the customer's piece of the application form to the customer, and handle account transfer on the same day and send transaction confirmation to the customer as well;
5. For the swap business handled by Bank of China, customer shall complete the settlement with Bank of China as scheduled, and handle the formalities of account transfer on the very day of settlement.
|
