Laws of the People's Republic of China

Announcement of the People's Bank of China concerning Expanding the Floating Range of Trading Price of the US Dollar against the RMB in the Inter-bank Spot Foreign Exchange Market

The People's Bank of China determined to expand the floating range of the trading prices of the US Dollar against the RMB in the inter-bank spot foreign exchange market for the purpose of further improving the regulated and managed floating exchange rate systemon the basis of market supply and demand and by referring to a basket of currencies, promoting the development of foreign exchange market, and improving the independent pricing and risk management capacity of financial institutions. The related particulars are hereby rendered as follows:

The floating range of the trading prices of the US Dollar against the RMB in the inter-bank spot foreign exchange market will be expanded from 0.3% to 0.5% as from 21May 2007, viz. the daily trading price of the US Dollar against the RMB in the inter-bank spot foreign exchange market may be floated within the range of 0.5% of the middle price of the US Dollar against the RMB on the current day as announced by China Foreign Exchange Center to the outside.

After the publication of this Announcement, the measures for the administering the floating range of trading price of the US Dollar against the RMB in the inter-bank spot foreign exchange market and the spread of US Dollar exchange rate quotation of the banks to their clients will not be changed, and the Circular concerning Further Improving the Administration of Trading Exchange Rates in the Inter-bank Foreign Exchange Market and the Exchange Rate Quotations of Foreign Exchange Designated Banks (Yin Fa [2005] No. 250) as promulgated by the People's Bank of China on 23 September, 2005 is still applicable thereto.

The People's Bank of China will, in light of the domestic and international economic and financial tendencies, on the basis of market supply and demand and by reference to a basket of currencies, maintain the normal floating of RMB exchange rates, keep the RMB exchange rates at a reasonable and balanced level, promote a basic balance of international payments, and guarantee the stability of macro-economy and financial market.

People's Bank of China

May 18, 2007