CHINA'S first currency futures exchange will soon be set up in Shenzhen to cater for the special economic zone's growing financial contact with the outside world.
Financial experts in Hongkong believe the experiment will also pave the way for China to develop an international futures market in the long run.
The New China News Agency said the Shenzhen currency futures exchange would become a key component of the foreign exchange swap centre in the city.
It said the exchange's main business would comprise entering into contracts among the banks and between banks and clients which specified the quantity, interest and settlement date for the foreign currencies traded.
Standard Chartered Bank treasurer Stanley Wong said Shenzhen, with a large external economy and foreign trade, should have the potential to develop a foreign exchange futures market.
He said it was good to see the Chinese authorities make bold reforms in the financial market.
''There have already been six to eight different kinds of futures exchanges in China, and it is just the right time to have one in foreign currency,'' he said.