10 April 2013 05:26 [Source: ICIS news]
SINGAPORE (ICIS)--China Foreign Exchange Trade System (CFETS) will launch direct trading between the yuan and Australian dollar in the interbank foreign exchange markets from 10 April onwards, CFETS announced on late Tuesday.
Direct trade between the two currencies will help promote bilateral trade and strengthen investment ties between China and Australia, according to CFETS, a division of the country’s central bank People’s Bank of China (PBC).
The move will also facilitate the use of both currencies in cross-border trade and the settlement of investments as well as help companies lower their transaction costs, CFETS added.
The Australian dollar will become the third currency after the US dollar and Japanese yen to trade directly with the yuan, according to Chinese media reports.
Australian Prime Minister Julia Gillard was quoted in local media during a visit to Shanghai on 8 April as saying direct currency trading will create opportunities for new financial integration. Gillard added that it would be a huge advantage for Australian companies, particularly small and medium-sized enterprises that want to do business in China.
China has been the Australia's largest trading partner in recent years, with more than a quarter of Australian exports, which comprise mainly natural resources such as coal and iron ore, delivered to the country.
Trade between China and Australia reached $122.3bn (€93bn) in 2012, according to an official from the Consulate General of China’s economic and commercial division in Sydney.
Chinese exports to Australia totaled $37.7m and Australian exports to China amounted to $84.6m, the official added.
($1 = €0.76)
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