Forex Settlement and Sales

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Forex Settlement and Sales

Commissioned foreign exchange settlement and sales refer to exchanges between RMB and foreign currencies processed by a bank for its customers. According to differences in delivery period, relevant businesses are divided into spot foreign exchange on commission and transactions between RMB and foreign exchange derivatives.

Spot foreign exchange on commission refers to RMB-foreign currency exchange settlement and sales transacted according to the foreign currency, amount and exchange rate agreed on between the bank and the customer, within two business days after the transaction date.

Transactions between RMB and foreign exchange derivatives refer to forward foreign exchange, RMB foreign exchange swap, RMB and foreign exchange currency swap and RMB foreign exchange option. Specifically, forward foreign exchange on commission refers to foreign exchange settlement or sale where the bank signs a forward foreign exchange agreement with the customer to specify that the foreign exchange settlement or sale be carried out at least two (inclusive) business days after the transaction date according to the foreign currency, amount, delivery time and exchange rate agreed on between the two parties.

(1) Foreign exchange under current account

Foreign exchange under current account refers to the settlement of foreign exchange earnings and foreign exchange sales to cover foreign exchange expenditures carried out under transaction items as goods, service, income and current transfers.

(2) Foreign exchange under capital and financial accounts

Foreign exchange under capital and financial accounts refer to the settlement of foreign exchange earnings and foreign exchange sales to cover foreign exchange expenditures carried out under transaction items such as capital account, direct investment, equity investment, other investments, domestic foreign exchange loans and RMB and foreign currency exchange of financial institutions.