Risk Management Of RMB-FX Trading Business Of Commercial Bank After The Reform Of RMB Exchange Rate Regime

The RMB foreign exchange business of commercial banks, whichmeets foreign exchange demand of domestic enterprises and individuals,provides the bank with the intermediary business revenue of the tradingspread. However, because of RMB is a managed floating exchange ratecurrency, the exchange rate fluctuations is still restricted. Therefore,commercial banks still face great market risk in the process of offeringRMB foreign exchange business.This thesis first reviews the process of the reform of the RMBexchange rate regime, and further elaborates the market risk on the RMBforeign exchange business. Followed by an analysis of the content of theexchange rate system reform for the specific impact of the RMB foreignexchange business, this thesis turns to the approach to risk managementof commercial banks in the RMB foreign exchange business. Finally,after the analysis a real trend in2012of RMB foreign exchange market,this thesis comes to a result that the three effective ways of handle themarket risk of RMB foreign exchange risk are trading positions in the interbank market, using derivatives for hedging and exchange ratemanagement.