HomeProduct Complimentary download China exchange launches cross-border iron ore, rubber trade in yuan

China exchange launches cross-border iron ore, rubber trade in yuan

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Publish time: 23rd December, 2013      Source: ChinaCCM
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China's Bohai Commodity Exchange announced the launch of cross-border spot trading of iron ore and natural rubber in the yuan currency in Hong Kong on Tuesday, another incremental step to boost the currency's global use.

China is promoting the international use of the "redback" in trade and investment in order to reduce reliance on US dollar, and the introduction of commodities trading settled in yuan is likely to lead to yuan denominated trade financing in the sector.

Mr Zheng Yu, vice general manager of Bohai Commodity Exchange said that "It is not normal to have only dollar settlement in commodities trading and trading in the yuan will be a good complement to that.'

The exchange, which is the first non-banking financial institution allowed to conduct cross-border yuan trade settlement, said it is planning to introduce more products settled in yuan.

Yuan trade settlement has expanded quickly since it first began in 2009 and the percentage of China's total trade settled in yuan has risen from 12% in 2012 to nearly 20%

Rapid growth of yuan trade has contributed to the expansion of offshore yuan pool in Hong Kong, which stood at CNY 780 billion in October, up about 30% from the end of last year.

Mr Zheng said that "The yuan trading service is a very important component of the yuan internationalisation process, as transaction value in commodities is much more significant than in the consumer sector.'