The China Foreign Exchange Trade System (CFETS), the interbank trading and foreign exchange division of China’s central bank, the People’s Bank of China (PBoC) has announced 7 new direct renminbi trading links.
The seven currencies which PBoC will launch direct trading as of Monday, December 12th include the Turkish lira (TRY), Polish zloty (PLN), the Swedish krona (SEK), the Mexican peso (MXN), the Norwegian krone (NOK), the Danish krone (DKR) and the Hungarian forint (HUF).
The activation of direct trading between the additional currencies is aimed to encourage bilateral trade and investment between China and the countries added. Facilitating the use of the Chinese currency in direct cross-border trade and investment reduces the cost of currency conversion.
It is understood from reports, a plus or minus 5% fluctuation trading band will be allowed in the yuan’s transaction price against the newly established yuan currency pairs.