The Research Of China's Foreign Exchange Derivatives Market Development

In July 21,2005,China carried out a new round of exchange rate formation mechanism reform,the system based on market supply and demand,reference to a basket of currencies and managed floating exchange rate system.The reform of the exchange rate formation mechanism is of great significance to the development of China's foreign exchange derivatives market.After the reform of exchange rate formation mechanism,the fluctuation rate of RMB against the US dollar increased and fluctuated in two directions.The exchange rate risk is increasing and the exchange rate risk is urgently needed to avoid the exchange rate risk.The foreign exchange derivatives can be used to avoid the exchange rate risk,but the development of our foreign exchange derivatives market is backward,and the product variety is short.Therefore,it is very important to study the development of the foreign exchange derivatives market in China.Therefore,this article focuses on the construction of foreign exchange derivatives market in depth and systematic research and discussion.The main body of this paper consists of six parts.The first part is an introduction,which mainly introduces the motivation and significance of the topic selection,literature review,research ideas and research methods.The second part introduces the types,characteristics,functions and risks of foreign exchange derivatives.The third part introduces the current situation of the foreign exchange derivatives market in China;the fourth part analyses the problems of the foreign exchange derivatives market in China: the lack of contract varieties in the field transaction;the market subject is single,the participation degree is low;the forward rate pricing mechanism is defective;the domestic and foreign derivatives market separates the arbitrage;the market regulator The system is relatively lagging behind.The fifth part sums up the experience of the development of international foreign exchange derivatives market in view of the problems existing in China's foreign exchange derivatives market: there are two modes for the development of foreign exchange derivatives market,namely,market oriented and government guided mode,and the development of foreign exchange futures in emerging markets needs policy support;give full play to the regulatory role of the self-discipline organization of the industry.And the enlightenment to our country is drawn: the improvement of the immediate market is the prerequisite for the development of the foreign exchange derivatives market;the foreign exchange futures can be introduced under the conditions of real requirement and capital control;the foreign exchange futures market can develop in a coordinated way with the OTC derivatives market;the balanced forward exchange rate should be determined by the market force;the national level legislation is necessary.We should implement unified and centralized supervision.The sixth part,based on the current situation and characteristics of China's financial market,puts forward relevant policy suggestions for the development and improvement of foreign exchange derivatives market: perfecting the foreign exchange sight,forward and swaps market,introducing foreign exchange futures contracts,introducing market maker system,cultivating diversified trading subjects,developing China's NDF market on the shore and developing the market.Adopting the government guided development mode and strengthening the government's supervision of the market.