China eases rules on trade-related forex advances
BEIJING, Dec. 24 (Xinhua) — Exporters will be able to increase their advances on foreign-currency payments to 25 percent from the current 10 percent, the China Securities Journal reported on Wednesday.
The decision came in a circular issued by the State Administration of Foreign Exchange (SAFE) on Tuesday night.
Importers’ quota for deferred foreign-currency payments also rose to 25 percent from 10 percent.
Analysts said the move would help small and medium-sized enterprises raise funds and improve their cash flow.
A banker who asked to remain unidentified told Xinhua the financial crisis has caused difficulties for many enterprises and this move would give them more operating capital.
The State Council, or cabinet, urged a higher quota of foreign exchange advances to support trade during a standing committee conference on Dec. 3.
SAFE official Cai Qiusheng was quoted by Tuesday’s Shanghai Securities Journal as saying that foreign exchange reserves were below their peak at 1.9 trillion U.S. dollars as of the end of September.
According to the paper, enterprises that have good credit and haven’t violated any foreign-exchange regulations can qualify for the new limits.
To prevent “hot money” inflows through trade, SAFE, the Ministry of Commerce and the General Administration of Customs issued a joint circular on July 14 to step up supervision of cross-border capital flows.
The foreign exchange agency told administrative departments at all levels to step up inspection to prevent large-scale cash outflows.
Forex Trading Continues to Grow in Popularity
Currency trading offers opportunities (and risks)One of the most popular forms of trading this year has been currency trading – and for good reason. Even though investments like stocks may lose across the board, with forex trading, there is always money to be made.
Indeed, GFT has seen explosive growth the last few months as people turn to currency trading. Kathy Lien, director of currency research at GFT Forex points out that GFT has seen a 37% surge in volume this year.
Forex trading provides a way for investors to:
- Hedge against other investments.
- Make money quickly. (Don’t forget you can lose it quickly as well, however.)
- Use leverage to their advantage. (Remember that leverage has a dark side: Without proper management, high leverage can lead to large losses as well as gains.)
Additionally, because of the nature of currency trading, there is always money to be made it is possible to make money in the following way: If you think the euro is going down against the dollar, but up against the pound, you can enter two different positions — one favoring the euro and one shorting the euro — and possibly make money on both. Of course, there is an equal possibility that you will be wrong and lose money on both positions.
However, it is important to realize that forex trading is very risky. And, while it can provide some benefits to the investor, it can also add up to large losses. Forex trading is a form of speculation. Additionally, volatile market conditions can lead to abrupt changes in direction, resulting in rapid losses.
It is important to balance your investment portfolio with a range of investments, some less risky than others, and to realize that no matter how “safe” an investment is, there is still a risk of loss.
Forex Broker Do I Really Need One
Writen by Mike Singh
Being involved in the Forex market you may have heard the term Forex broker many times before. But do you really know what this individual does or what it means? A Forex broker is one who assists not only traders and firms, but also individuals involved in the Forex market. The Forex broker’s assistance can be in providing information or may be actually trading for the person or company they are representing. A Forex broker does charge a fee for any services they provide, depending on which one it is.
A list of services that a Forex broker can provide can range from general advice to real time quotes to news feeds. There are different ways that these brokers can give advice. Some Forex brokers use their own personal experience and understanding. While others rely on software to provide the information their service provides.
There have been some advantages and new benefits allowed for Forex brokers and the Forex market since the Internet has evolved. Because of this the individual Forex broker can better provide accessibility to the Forex market, impossibility in previous years. This meant that only banks or large financial institutions would have any access to the Forex market.
There has been a huge growth since then of Forex brokers, which can make it hard to choose, especially for beginning or new traders to the market. The best advice when looking for your Forex broker is to get as many referrals and recommendations as you can. This can better help you decide in finding a reputable and competent Forex broker.
In the instance where you cannot get a referral or recommendation, it is up to you to do your own thorough and careful research. You should find out the amount of trades they are conducting and with how many clients. Of course you should also find out the Forex broker’s amount of experience. The most important thing to look for in your own research is a Forex broker who has learned by experience over several years and has the right amount of instinct to give the right advice. Of course you should also examine what kind of services and what variety they provide, such as mini accounts, market intelligence, market analysis, news feeds and real time quotes.
When deciding if you would like to use a broker or not, you need to take all advantages as well as disadvantages into consideration. This is a personal decision, one in which referrals and recommendations are highly recommended when looking, or at the very least extensive research on your part. Choosing the right Forex broker, in the end, can make the difference between success and failure in the Forex market.
