Beijing: China on Monday said it will allow direct trading between the Chinese yuan and Swiss Franc in the inter-bank foreign exchange market from tomorrow as part of the Communist giant's push to popularise use of its currency globally.
The central parity rate between Renminbi and Swiss Franc will be decided according to the average quotation of direct trading market makers before the market opens each working day, state-run Xinhua news agency quoted China Foreign Exchange Trade System (CFETS) as saying.
The move will lower trading costs for China and Switzerland, facilitate use of the two currencies in bilateral trade and investment and boost economic and financial cooperation between the two countries, according to the CFETS.
China is seeking to promote the yuan, also known as the renminbi (RMB) as a global reserve currency alongside the dollar. RMB clearing abroad has become a major tool in promoting its globalisation. Such business has been established in Hong Kong and Macao, as well as foreign cities including Singapore, London, Frankfurt, Seoul, Paris, Luxembourg, Doha, Toronto and Sydney.
Swiss Franc is the 12th foreign currency that can be directly traded with the Chinese yuan in the inter-bank foreign exchange market.
Swiss franc trading would promote bilateral trade and investment between China and Switzerland, the central People's Bank of China said in a statement.
The Swiss franc will be allowed to fluctuate five percent on either side of a central rate, the bank said.
