SHANGHAI (Reuters) - China’s domestic foreign exchange market is planning to launch trading of the yuan against the Australian dollar and Canadian dollar, three sources with foreign banks told Reuters.
The China Foreign Exchange Trade System (CFETS) may launch the new trading pairs as soon as late this year or early next year, the sources who had direct knowledge of the plans said.
A spokeswoman with CFETS declined to comment.
The yuan is currently traded onshore against the dollar, euro, sterling, yen, Hong Kong dollar, Malaysian ringgit and Russian rouble.
China has been gradually expanding the currencies against which the yuan is traded, as it continues to take steps to internationalize its currency, including launching trading against the ringgit and rouble last year.
“China needs to add direct yuan trading against the Aussie because of increasing deals between China and Australia in particular in the mining sector,” said one source at a foreign bank in Shanghai.
“To add the Canadian dollar, it appears to be a move to acknowledge the important of one the Group of Seven economies as well as being part of China’s efforts to gradually have trading in all major currencies versus the yuan.”
A separate official source said that China was considering eventually introducing trading of the yuan against all major foreign currencies.
The yuan has attracted increasing international attention as China’s economy surpassed Japan’s to become the second largest in the world.
The yuan is not fully convertible under the capital account but China has made efforts to raise the international status of its currency over the past couple of years.
For one, the government has turned Hong Kong into a center for offshore yuan, as more and more trade is conducted in the renminbi, the official name of the currency, leading the creation of bigger and bigger yuan pools outside mainland China.
Reporting by China newsroom; Editing by Jason Subler