Beijing, China (4E) – China and New Zealand will begin direct trading between their currencies starting Wednesday as the world’s second-biggest economy promotes wider usage of the yuan in global trade and finance.
The People’s Bank of China (PBOC) will announce a daily central parity of its currency against the New Zealand Dollar around 0145 GMT, according to the China Foreign Exchange Trade System, which is an arm of the central bank.
The move will help lower costs related to foreign-exchange transactions between the two countries, according to the PBOC’s website Tuesday. New Zealand prime minister John Key was in Beijing to make the announcement for the change.
New Zealand is the sixth nation to directly trade its currency with the renminbi, after the United States, Japan, Australia, Russia and Malaysia.
Trade between China and New Zealand increased 29 percent to 18.86bn New Zealand dollars ($16bn) in the 12 months through January, according to government data, with the Asian nation surpassing Australia to become New Zealand’s biggest trading partner.
Among the banks that received approval from the PBOC to act as market makers for the two currencies include HSBC Holdings Plc, Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp.