China considers yuan trade against Ruble, Won, Ringgit

13:25, April 07, 2010

China's monetary policy-makers are considering allowing the yuan to trade against the Russian ruble, South Korean won and Malaysian ringgit, in a bid to promote cross-border trade and test the waters of gradually making the yuan a global currency.

The People's Bank of China, the central bank, is investigating the possibility of offering new "foreign-exchange pairs" at its Shanghai inter-bank currency trading market, as traders now can buy or sell the yuan against the U.S. dollar, the euro, the yen, the Hong Kong dollar and the British pound, The Bloomberg News quoted an official at the China Foreign Exchange Trade System as saying on Wednesday.

The central bank authorities have yet to make a final decision, the official said.

"That would be a further step towards making the yuan an international currency," said Liu Dongliang, a Shenzhen-based foreign-exchange analyst at China Merchants Bank, China's fifth-largest lender by market value. "The move would help foreign companies buy or sell the Chinese yuan at lower costs."

China is seeking greater use of the yuan to reduce reliance on the U.S. dollar after Premier Wen Jiabao said last month he is "concerned" about holdings of large assets denominated in the U.S. dollar, The Bloomberg News reported.