THE Guangdong branch of the Bank of China (BOC), the heavyweight player in foreign exchange in Guangzhou, announced Sunday it would unilaterally slash its margin of foreign exchange commission to 5 percent.

　　The new rate became effective on the day of announcement.

　　But, according to media reports, the Guangzhou branch of the Bank of Communications had quietly done the same thing as early as Sept. 9.

　　On the 10th anniversary of the bank’s launch of its purchase and sale of personal foreign exchange, BOC Guangdong branch introduced a package of preferential measures, including the lowest ever foreign exchange margin for individual deals.

　　According to a bank source, the 5 percent margin applies to any individual deal exceeding US$70,000, compared with 11 percent for amounts of US$50,000 before the announcement.

　　But a lower margin can be negotiated for a deal over US$1 million.

　　The Guangzhou branch of the Bank of Communications also allows a negotiated lower margin for bigger amounts.

　　The two branches now have 80 percent of the foreign exchange market share in Guangzhou, down from 90 percent in the past year, with other domestic banks cutting into the city’s foreign exchange market. It is understood that foreign banks are waiting for the nod from the Central Government to participate in foreign exchange deals.

　　According to an official of the Guangzhou branch of the Bank of Communications, big clients choose banks on the basis of margin difference. Since big clients accounted for most of the deals, it was normal to lower the margin to attract them.

　　The Guangzhou branch of China Merchants Bank said it would base its move on the market reaction to the two banks’ new measures.(Wu Yan)