CHINA is taking a step towards making the yuan fully convertible with the launch of a pilot scheme in Guangzhou allowing foreign travellers to change foreign money directly into yuan.
The pilot scheme, to be launched before June, will effectively float the yuan against other currencies on an open foreign exchange market.
Those undertaking forex transactions will be allowed to execute at the market rate and not the pre-determined official rate of 74 yuan to HK$100.
An official at the State Administration of Exchange Control, Guangdong branch, said yesterday that the plan to set up the foreign exchange market had been submitted to Beijing for approval.
''We are stepping up the establishment of the open market and looking for an ideal venue so that it can be in operation by June when Beijing gives its approval,'' said the official.
At present, foreign exchange swap centres around the country allow enterprises to trade their surplus foreign exchange at prices in accordance with supply and demand.