On January 13, 2020, the State Administration of Foreign Exchange (SAFE) released the Circular of the State Administration of Foreign Exchange on Improving Foreign Exchange Risk Management for Foreign Institutional Investors in Interbank Bond Markets (Huifa No. 2 [2020]) (Circular) to further facilitate foreign exchange risk management by foreign institutional investors in interbank bond markets. Considering the issues that concern foreign investors and settlement agents, the SAFE has recently published the Q&A on Policy Set Forth in the Circular (in Chinese and English versions). The Q&A, with a focus on 16 dimensions mentioned in the Circular, elaborates on operational issues such as scope of foreign exchange risk exposure, changes in the channels of hedging against foreign exchange risks, account opening, and fund transfers.

The SAFE will continue to follow the requirements of the CPC Central Committee and the State Council to press ahead with reform and opening up in foreign exchange, deepen the development of foreign exchange markets and launch more foreign exchange facilitation services to better serve the growth of the real economy and the opening up of the financial market.