China will launch the trading of the Australian dollar (AUD) and the Canadian dollar (CAD) against the yuan on the interbank foreign exchange market starting from Nov. 28, the China Foreign Exchange Trade System (CFETS) announced Thursday.
The move followed the introduction of the Malaysian ringgit and the Russian ruble into the interbank forex market last year and marks the government’s latest effort to make the yuan an international currency.
The CFETS said in a statement on its website that it will provide quotations for spot, forward and swap transactions between the AUD and the yuan as well as between the CAD and the yuan.
On the spot market, the two foreign currencies can trade within 3 percent around their daily central parity rates set by the central bank, said the statement.
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The central parity rates of the AUD and CAD against the yuan will be based on the central parity of the yuan against the U.S. dollar of the same business day and the exchange rates of the AUD and CAD against the U.S. dollar at 9 a.m. of the same business day, it said.
China now allows interbank trading between the yuan and the U.S. dollar, HK dollar, Japanese yen, euro, British pound, Malaysian ringgit, and Russian ruble.
China has been liberalising the Yuan with both on shore and off shore trading, complex products like options and swaps have been trading in the inter-bank market.