Won The Central Parity Of The RMB Exchange Rate Will Be Decoupled From The U.S. Dollar.

From next year, the won won the central parity of the RMB exchange rate will be based on direct market maker quotations, and will no longer be formed by the exchange rate between the won and the US dollar and the RMB to us dollar exchange rate.

At present, there are 12 market makers in the Korean yuan direct trading market, namely, 5 Korean banks and 7 foreign banks, including Bank of China, New Zealand, Korea, and other banks.

Assuming that the average price of the Korean won against the US dollar is 1 US dollars to 1200 won, the middle price of the RMB against the US dollar is 1 yuan to 6 yuan. According to the previous exchange rate way, the won price is 6 yuan to 1200 won.

But in the future, the won price will be decoupled from the US dollar, and the average won by the won yuan direct trading market maker.

At present, in Korea's foreign exchange market, the exchange rate of all currencies of the yen, euro and other currencies except the US dollar is linked to the US dollar in a way of calculation.

The Korean yuan direct trading market started in December 1, 2014. Because the initial trading is not active enough, the South Korean government will indirectly calculate the cross exchange rate between the won and the RMB against the US dollar exchange rate as the middle price of the direct trade between the Korean won and the yuan, so as to prevent the Korean won and the RMB from being undervalued or overestimated.

But recently, won Yuan directly.

The average daily turnover is more than 2 billion US dollars, which has already formed the scale effect, and has the condition of reference to the market equilibrium exchange rate to form the intermediate price of the exchange rate.

In addition, in order to welcome the 1st Anniversary start of the Yuan's direct trading market, the foreign exchange brokers will reduce the Commission of Korean won RMB exchange business from the 1 to the Commission level of the Korean won dollar exchange business.

It is indicated that the decrease in foreign exchange paction costs will reduce the exchange charges for individuals and enterprises.

According to the data released by the Ministry of Finance and planning this month, the average daily trade volume between the won and the RMB in October was 2 billion 640 million US dollars, which was 3 times that of December last year. The Korean won direct trading market started to reach 20% to 30% of the average daily trade volume ($8 billion) of the Korean won dollar in less than a year.

The yen won direct trading market, which was opened in October 1996 but only 4 months later, was dismal due to the low daily average turnover (400 million yen).

However, in the third quarter of this year, the proportion of RMB settlement to China exported to Korean enterprises accounted for only 3.4% of the total export settlement to China, which was quite close to the medium and long term target set by the Korean government (20%).

This shows that the proportion of trade settlement in the Korean yuan direct trading market is low, and the proportion of pactions between banks is high. This situation needs to be improved.

In its speech today, the South Korean government also said it plans to link the Bank of Korea (central bank) and the clearing bank of the RMB business, the settlement system of the Bank of communications Seoul branch, to build the Korean yuan's simultaneous settlement system for RMB, and to improve the relevant systems to ensure the stability of the clearing bank's RMB settlement and the supply of RMB liquidity.