People's Bank of China (PBOC)
The People's Bank of China (NBK, Bank of China) (Chinese tr. 中國人民銀行, 中中国人民银行, Pinyin: Zhōngguó Rénmín Yínháng, Pall: Zhongguo Rénmín Yínháng) is the central bank of the PRC. The Bank of China reportedly has the largest foreign exchange reserves in the world, the volume of which exceeds 3.2 trillion U.S. dollars.
History of the People's Bank of China
The People's Bank of China was the result of the merger and nationalization of three major commercial banks in 1947: Huabei Bank, Beihai Bank and Xibei Agricultural Bank. Because of the civil war, the NBK's headquarters were located in Shijiazhuang and were moved to Beijing only in 1949.
From 1949 to 1978, the Bank of China was the only bank in the country. Its scope of activity included not only the functions assigned to the Central Bank, but also those typical of commercial banks, including the servicing of institutions and private deposits.
In 1980, a reform was carried out, as a result of which four independent banks owned by the state were established to conduct settlements in the country. By decision of the State Council of China since 1983, the NBK began to carry out exclusively the functions of the Central Bank.
Legally the functions of the Central Bank were finally defined at the Third Plenum of the National People's Congress in March 1995.
As a result of the 1998 structural reform, all provincial and local branches of the People's Bank of China were abolished. The boundaries of the current nine branches of the NBK do not correspond to the administrative division.
In 2003, the Bank of China was given additional powers to ensure financial stability and to conduct a set rate monetary policy.
Structure and Functions of the Bank of China
The management of the Bank of China is carried out by the Governor and his deputies. Their appointments and dismissals are the responsibility of the President of the People's Republic of China with the approval of the National People's Congress.
The People's Bank of China consists of 19 departments, including: the main department, legal, monetary policy, foreign exchange, financial stability, etc.
In addition, the Bank of China has an anti-money laundering center, a banking school, a news agency, a financial literature publisher, a banknote and coin enterprise, and other organizations.
Currently, the NBK has two main functions: conducting monetary policy and regulating the financial sector.
A number of experts point out that the Chinese yuan is undervalued relative to other world currencies, giving China a significant advantage in trade, and they see the role of the Bank of China in this, which keeps the yuan at the right level through its reserves.
It is noteworthy that interest rateThe standard set by the People's Bank of China is calculated by economists so that it is a multiple of 9, because this number is sacred in China. The standard set by the NBK is that there are exactly 360 days in a year and always 30 days in a month. In order to avoid periodic fractions and other difficulties in calculating daily interest rates, the annual interest rate should be divided by 360 and therefore by 9.
Useful links about the Bank of China
- People's Bank of China website: pbc.gov.cn
- China's national currency: yuan