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Yuan trading extended as global appeal grows
December 23, 2015, 4:11 pm

The Chinese currency has been reaching record high market shares this year [Xinhua]

The Chinese currency has been reaching record high market shares this year [Xinhua]

Even as China’s yuan currency gained slightly against the US dollar on Wednesday, the country’s central bank announced new measures to increase its appeal.

The People’s Bank of China (PBOC) said that starting January 4, the hours for trading in the yuan currency would be increased by seven. Instead of halting currency trading at 4:30 pm, mainland markets will be allowed to trade in the yuan until 11:30pm.

The measure is designed to boost the yuan’s strength and also bring Chinese markets more in tune with global currency markets which operate on a 24-hour basis.

The PBOC’s move comes following the Fifth annual Plenum meeting of the Central Committee of the Communist Party of China (CPC) which pledged to open Chinese markets to foreign investors.

The yuan is currently the fourth most used currency around the world, according to the Society for Worldwide Financial Telecommunications (SWIFT)

More than 100 countries used the yuan for payments in August, of which over 90 percent of flows were concentrated in 10 countries. Singapore processed 24.4 percent followed by the United Kingdom with 21.6 percent.

More than 1,700 financial institutions made worldwide payments in the yuan, up 14 percent from a year earlier.

In early December, the International Monetary Fund announced it would add the yuan to its basket of four reserve currencies, known as Special Drawing Rights, or SDRs. This takes effect on October 1, 2016.

The PBOC also announced in early December that it would not only peg the yuan against the dollar but also included a parallel index against a basket of 13 other currencies.

The BRICS Post with inputs from Agencies

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