China to extend yuan trading hours in bid to boost global use of its currency

Regulators have told some banks to prepare for an extension of onshore yuan trading hours, sources say

The trading extension could result in 18 hours of yuan trading in a day, compared with 14 hours currently

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Regulators led by the People’s Bank of China (PBOC) have told some banks to prepare for an extension of onshore yuan trading hours, according to people familiar with the matter. Photo: Reuters

Published: 7:17pm, 27 Jun 2022

China plans to extend the yuan’s trading hours as it seeks to increase global investor participation in onshore currency trading as part of its internationalisation push.

Regulators led by the People’s Bank of China (PBOC) have told some banks to prepare for an extension of onshore yuan trading hours, according to people familiar with the matter, who asked not to be identified discussing private information.

The trading will close at 3am the next day, instead of the 11:30pm local time, the people said. It’s not known when the change would be effective.

The PBOC had pledged to extend currency trading hours and vowed to further open up the financial market in May after the International Monetary Fund lifted the yuan’s weighting in the Special Drawing Rights currency basket. The further extension of yuan trading into New York hours could boost China’s foreign exchange trading volume, which dwindled in May due to coronavirus lockdowns in Beijing and Shanghai.

The extension of yuan trading hours would help meet increasing demand for yuan transactions

Ju Wang

“The extension of yuan trading hours would help meet increasing demand for yuan transactions,” said Ju Wang, head of Greater China foreign exchange and rates strategy at BNP Paribas SA.

“International investors have significantly increased their exposure to Chinese assets over recent years,” Wang said.

The PBOC and State Administration of Foreign Exchange did not immediately reply to faxes seeking comment.