A UNIFIED foreign exchange swap centre will be established in China next year to help stabilise the yuan during the currency's gradual transition to full convertibility.
China has promised the General Agreement on Tariffs and Trade (GATT) that it will merge its dual-track system of foreign exchange by 1998 as part of its bid to join the global trade body.
The official rate of the yuan is set daily by exchange authorities and the swap rates are determined by supply and demand in more than 100 state-run exchange centres in major cities.
Under this system, exchange rates vary widely in different swap centres on the same day.
On the first day of trading after the removal of price controls at the swap centres earlier this year, the market price was 9.9 yuan to the US dollar in Beijing and 10.2 in Shanghai.
''Establishment of a unified swap centre would minimise the chances of unreasonable fluctuation of the yuan. It would be beneficial to the healthy development of foreign trade,'' said an official at the Bureau of Foreign Exchange Control.