Rate swap experiment to start
10 February 2006
The People's Bank of China said it would soon trial trading of yuan-denominated interest-rate swaps in an effort to expose interest rates to greater market influence, the Wall Street Journal reported. Designed to help banks better price capital and investors hedge interest rate risk, the plan will also expand a growing domestic fixed-income market and pave the way for more interest-rate derivatives. The central bank said it will gradually expand the trial and will allow the full launch of a yuan interest-rate-swap market as soon as possible.