Mainland trading in yuan now more open

Forex system gives foreign investors access to real-time interbank data

PUBLISHED : Thursday, 29 November, 2012, 12:00am
UPDATED : Thursday, 29 November, 2012, 3:46am

Yuan trading on the mainland has become more transparent as the China Foreign Exchange Trade System (CFETS) makes real-time official data available to investors outside the country for the first time.

The launch of the data service today is the latest step towards the yuan's internationalisation.

The service, provided by Bloomberg, allows users access to live interbank pricing in the onshore yuan market from CFETS, a unit of the People's Bank of China.

Users can view real-time executable US dollar-yuan quotes and trades in the spot market and the swap and forward markets. At present, live indicative quotes of yuan against other currencies are provided by banks.

"Their [CFETS'] willingness to provide these rates really gives you some insight into the internationalisation, or the drive for the internationalisation of the currency," Tod Van Name, Bloomberg's global head of foreign exchange, economics and commodities, told the South China Morning Post .

The Post reported in August that Bloomberg faced difficulty selling its terminals on the mainland after it reported on the fortune of the extended family of Xi Jinping, who has been elected Communist Party chief.

A Bloomberg spokeswoman did not address that issue directly yesterday but said the firm had a long-term commitment to support customers on the mainland and was pleased to work with CFETS on the service.

Bloomberg started a trial run a couple of weeks ago, and users in more than 60 companies, including on the mainland, are trying out the service.

Sam Phoen, the head of global markets at ANZ Bank (China), said: "Offshore players who are invested in China will have better visibility when hedging against movements of the renminbi."

The data service also provides historical trade sizes and pairs of the yuan against eight other currencies. Van Name said the data was important for users in their analysis.

"For offshore players, it was hard to see where the mainland market was trading in the past," he said, so the additional information was likely to boost the yuan's trading volume.

A white paper on the yuan's internationalisation released this month by the Society for Worldwide Interbank Financial Telecommunication said the currency was underrepresented in the markets, accounting for just 0.9 per cent of global foreign exchange trading in June last year.