Laws of the People's Republic of China

The People's Bank of China

Circular of the People's Bank of China on Adjusting the Policies on Administration of Foreign Currency Banknotes

Yinfa [2002] No.283

September 9, 2002

Each branch and business administrative department of the People's Bank of China, each central branch in the provincial capital city and in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo; each branch and department of foreign exchange administration of the State Administration of Foreign Exchange (SAFE) in the province, autonomous region and municipality directly under the Central Government, each branch of SAFE in Shenzhen, Dalian, Qingdao, Xiamen and Ningbo; and each Chinese-capital designated bank of foreign exchange:

Questions related to the adjustment of the administration of foreign currency banknotes are hereby notified as follows:

1.

In setting the nominal rate of exchange for US dollars, the trading price of spot exchange set forth by the designated banks of foreign exchange shall not be 0.17% higher or lower than the transaction middle price published by the People's Bank of China; the purchasing price of banknotes shall not be 0.75% higher or lower than the trading middle price of the corresponding spot exchange, and the selling price of banknotes shall be equal to the that of the spot exchange.

2.

In setting the nominal rate of exchange, the purchasing price of HK dollar banknotes set forth by the designated banks of foreign exchange shall not be 0.75% higher or lower than the trading middle price of the corresponding spot exchange, the purchasing prices of Euro and Japanese Yen banknotes shall not be 1% higher or lower than the trading middle prices of the corresponding spot exchange; the selling prices of the aforesaid banknotes shall be equal to those of the corresponding spot exchange; the existing Policies on the difference between the purchasing price and selling price of spot exchange shall remain valid. With respect to the range between the prices of banknotes and those of spot exchange, the existing policies shall also remain valid.

The nominal rate of exchange set forth by the designated foreign exchange banks may fluctuate within the ranges determined in the preceding paragraphs, and may be different according to the markets of different areas within the aforesaid ranges in order to provide more competitive and high-quality services to the clients.

3.

The branches and sub-branches of the designated banks of foreign exchange in border trade areas of Heilongjiang, Inner Mongolia, Xinjiang, Tibet, Yunnan and Guangxi etc, may post the exchange rates of Renmingbi against the currencies of the bordering countries. The difference between the purchasing and selling prices may be determined by the banks themselves, and the foreign currencies collected may be disposed by themselves.

4.

This Circular shall enter into force as of October 1, 2002. If any previous provisions conflicts with the contents of this Circular, this Circular shall prevail. The branches of the SAFE shall, upon receiving this Circular, transmit it as soon as possible to the sub-branches and the commercial banks (including foreign-funded banks) under their respective jurisdictions. Each bank shall report its daily nominal rate of exchange to the SAFE before 9 am every day. If any problem is encountered in the implementation of this Circular, please report to the SAFE in a timely manner.

Contact entity: Department of International Balance of Payments of the SAFE

Contact telephone number: (010) 68402160