Top bank offers dollar-denominated paper gold www.chinaview.cn 2006-03-03 10:49:54
BEIJING, March 3 -- Bank of China, the country's top foreign exchange lender, will allow depositors to buy and sell gold products with their U.S. dollar accounts as part of a new service to retain wealthy clients, a bank official said Wednesday.
Some of the biggest domestic banks already allow depositors to buy and sell certificates linked to the price of gold, as part of a general expansion in the number of investment tools open to individuals.
The interest in gold has risen with its soaring price. Gold hit a 25-year high in early February.
"Chinese people now hold more foreign currencies, mainly the U.S. dollar, and it will be easier for them to buy gold products directly by using dollars instead of going through a complicated conversion from the yuan," said an executive preparing for the new service at a Shanghai branch of Bank of China.
The product is expected to be launched soon in Shanghai, where domestic banks often unveil their more sophisticated products to test the market, before extending the service to other cities later in the year, he said.
China will open its retail banking sector to foreign competition by the end of this year, and domestic lenders are stepping up efforts to retain wealthy clients.
The new product also helps the bank reduce its foreign exchange risk in gold trading, the Bank of China executive said.
"Ultimately we buy the gold on the international market by using dollars not yuan," he said.
Depositors must open a U.S. dollar-denominated account to be able to buy the new product. The paper gold certificates are denominated at 10 grams each.
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