REPORT ON CHINA INTERBANK FOREX MARKET IN FEBRUARY 2002
There were totally 17 sessions of trade in February 2002, which ended up with US$6.98 billion accumulatively. The average daily turnover was US$411 million, down 1.31 per cent compared with January, but up 2.14 per cent compared with the same period last year. Daily turnover decreased for USD, HKD and JPY, compared with the month before. When compared with the same period last year, only the daily turnover for JPY decreased, while the other two increased.
The weighted average exchange rate of USD rose gradually from 8.2766 at the beginning of this month. After the Spring Festival, USD turnover fell sharply, and the weighted average rate dropped from the highest of 8.2770 to the lowest of 8.2765 at the end of February, the same level as that of at the end of January.
HKD rose in fluctuation. The weighted average price of HKD at the beginning of this month was 1.0607. It shot up twice to a high of 1.0609 during the Festival period and closed at 1.0607 at the end of the month, which was 2 bips lower than 1.0609 at the end of January.
JPY kept fluctuating at a lower price in February. After the weighted average price reached the highest of 6.2565 on February 5, it fluctuated downward. At the end of February, it closed at 6.1790, 618 bips lower than 6.2408 at the end of January.
Compared to January, daily supply in forex market shrank and daily demand increased in February. The surplus shrank by US$1.49 billion compared to the month before while the daily surplus decreased by 10.15 per cent and 5.97 per cent when compared to January and February 2001, respectively.
There was a long holiday in February, which resulted in slack interbank forex market; the interest rate cut did not affect the stability of RMB exchange rate; the statistical data supported the expectation that domestic economy develop steadily.
The total imports reached US$18.97 billion in January 2002, increasing 21.9 per cent year-on-year, and exports was US$ 21.7 billion, up 29.2 per cent compared with January 2001. The surplus in January was US$2.73 billion while the surplus was US$ 2.11 billion in December 2001.
The contracted FDI in January 2002 rose 33.54 per cent year-on-year, and the utilized FDI rose 47.97 per cent compared with January 2001.
The PBC announced a cut in the RMB interest rate on February 21. The exchange rate of RMB, however, was unaffected on that day. Since the exchange rate of RMB is mainly affected by the export and import situation, the rate cut cannot reduce the export cost of enterprises in the near future. Therefore, the exchange rate of RMB will not be affected in the foreseeable future.
(by Wu Jingjing)