China has extended the
trading hours for the onshore yuan to enable the local market to overlap with
European and US markets – a move seeking to “accelerate the development
and boost the opening up of the foreign exchange market”.
From January 4, the
China Foreign Exchange Trade System (CFETS) will trade from 9.30am local time
to 11.30pm. This doubles the current seven hour trading window for onshore yuan
and sees the market remain open until mid-afternoon in Europe and also take in
the US market open.
The move is widely
seen as another step towards liberalisation by Chinese authorities, after the
RMB was accepted
as a reserve currency by the International Monetary Fund last month.
CFETS will still
publish a “closing” rate at 4.30pm local time, however it will also publish
hourly reference rates at the top of the hour until the new close.
According to a
statement on the State Administration for Foreign Exchange (SAFE) website, a
secondary move is also taking place to further open up the local market. SAFE
says after applying to CFETS to become a member of the interbank foreign
exchange market, qualified overseas players approved to provide RMB purchases
and sales services can access the interbank foreign exchange market, and
participate through the trading system of the CFETS in the trading of all
listed trading categories allowed in the RMB purchases and sales business,
including spot, forward, swap and options transactions. “Foreign players
shall participate in the trading under RMB purchases and sales in the interbank
foreign exchange market, in accordance with laws and regulations,” SAFE