New Reuters system allows yuan trading

SHANGHAI - CHINA Foreign Exchange Trade System (CFETS) and Reuters Group said yesterday that they have launched a new trading system that would help to develop the interbank currency market.

Trading of the yuan against foreign currencies on the new system began yesterday, while trading between foreign currencies started on March 12, Reuters said in a statement.

The new system marks the first time China's currency, the yuan, is being traded against foreign currencies with Reuters Electronic Trading technology.

In 2005, Reuters helped CFETS launch its first multi-bank portal for trading between foreign currencies.

Banks can use the new system to trade foreign exchange instruments, including forwards and swaps, introduced by market operator CFETS since the yuan's peg against the US dollar was removed in July 2005.

China's foreign exchange market is expanding as a result of regulatory reforms and ballooning foreign trade.

Average daily turnover of foreign currency trade rose by 18 per cent from the previous month to US$456 million (S$690.7 million) in January.

Data on yuan turnover was not available.