The Introduction Of Currency Futures Derivatives

Since the opening up thirty years ago, China has archived great success in the economic development. The foreign Reserve is increasing,and the Risk of foreign exchange rate is becoming bigger ,so we have an urgent need to have an effective financial instrument to manage the risk of foreign exchange rate. Foreign Forward,Foreign Swap and Foreign Futures are the most popular financial instruments of managing foreign exchange rate risk. There are only Forward and Swap in foreign exchange derivative market of china now,and the introduction of the Foreign Futures is very siginificant.This article analyzes the introduction of the Foreign Futures from the Feasibility and the necessity. The research point of view bases on the Horizontal and longitudinal dimention. Through the analysis of developed countries, as well as some developing countries who have similar condition with China,we have a lot of inspiration. We found the introduction of the Foreign futures is not only feasible ,but also necessary.The article uses the empirical analysis to analyze the problem of the necessity through a process of Time Series name ARMA process which is very useful and popular in research of financial instrument. We reach the conclusion that the foreign forward market is not effective given current conditon;The foreign exchange rate risk can not be managed by one or some foreign derivatives;We have some more effetive foreign derivative such as foreign future to manage the foreign exchange rate risk. Only in this way can we grasp the "first advantage" and master the independent pricing right of the RMB foreign exchange rate to manage the foreign exchange rate risk more effectively.