{
  "title": "Establishing a Foreign Exchange Futures Market in China",
  "publication": "IMF Working Papers, November 12, 2021",
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  "summary": "During China’s transition toward a more flexible exchange rate, it is essential to further develop its foreign exchange (FX) derivatives markets to meet the growing hedging needs associated with greater exchange rate fluctuations.",
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    {
      "heading": "Overview",
      "content": "- Title: Establishing a Foreign Exchange Futures Market in China\n- Authors: Zhongxia Jin, Yue Zhao, Haobin Wang\n- Date: November 12, 2021\n- Purpose: Assess the case for developing an FX futures market in China to support the economy's transition toward a more flexible exchange rate and to meet growing hedging needs associated with greater exchange rate fluctuations.\n- Context: OTC FX derivatives markets already exist in China, but a standardized FX futures market is absent and proposed to offer critical complementarities through standardized products, greater transparency, and centralized oversight."
    },
    {
      "heading": "Empirical findings on spot exchange rate volatility",
      "content": "- Research approach: Analyze the impact of establishing FX futures markets on spot market volatility using data from major emerging market economies.\n- Key empirical result:\n  - An FX futures market is not empirically associated with an increase in spot market volatility; in some cases, it is associated with a decrease in spot market volatility."
    },
    {
      "heading": "Rationale and benefits of an FX futures market",
      "content": "- Market advantages highlighted:\n  - Standardized products\n  - Greater transparency\n  - Centralized oversight\n- Target beneficiaries:\n  - Small and medium-sized enterprises (SMEs) with hedging needs\n  - Regulatory authorities seeking enhanced regulatory efficiency"
    },
    {
      "heading": "Policy recommendations and regulatory design",
      "content": "- Main recommendation:\n  - Substitute the inefficient documentation requirement of underlying exposures with a new set of market-oriented measures for the purpose of prudent regulation.\n- Intended outcome:\n  - Facilitate a well-functioning FX futures market that satisfies hedging demand while maintaining prudent oversight.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2021/11/12/establishing-a-foreign-exchange-futures-market-in-china-462372"
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    "Authors: Zhongxia Jin, Yue Zhao, Haobin Wang",
    "Published: November 12, 2021",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781513584843.001",
    "Title: Establishing a Foreign Exchange Futures Market in China",
    "Authors: Zhongxia Jin, Yue Zhao, Haobin Wang",
    "Date: November 12, 2021",
    "Purpose: Assess the case for developing an FX futures market in China to support the economy's transition toward a more flexible exchange rate and to meet growing hedging needs associated with greater exchange rate fluctuations.",
    "Context: OTC FX derivatives markets already exist in China, but a standardized FX futures market is absent and proposed to offer critical complementarities through standardized products, greater transparency, and centralized oversight.",
    "Research approach: Analyze the impact of establishing FX futures markets on spot market volatility using data from major emerging market economies.",
    "Key empirical result:",
    "Market advantages highlighted:",
    "Target beneficiaries:",
    "Main recommendation:",
    "Intended outcome:",
    "**Working Paper**"
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