Beijing (AFP) – China will extend trading hours for its currency starting next month, the central bank said Wednesday, after the International Monetary fund included the yuan in a global basket of reserve currencies.
Trading hours for the yuan, which currently close at 4.30 pm local time (0800GMT), will close at 11.30 pm in the People’s Bank of China’s Foreign Exchange Trade System (CFETS), the bank said in a statement on its website.
The yuan’s spot rate at 4.30 pm will be the day’s last price, it added.
The changes allow more overseas banks to participate in the onshore foreign-exchange market.
They will “accelerate the development of the foreign exchange market” in China, the statement explained.
The decision comes as China seeks to increase usage of the yuan in the wake of the International Monetary Fund’s decision earlier this month to include the currency along with the dollar, euro, yen and pound in its elite reserve currency basket from October of next year.
“The trading hours extension is a vital step in bolstering the yuan’s global use as this allows the exchange rate to reflect news taking place outside of Asia hours,” Kenix Lai, a foreign-exchange analyst at Bank of East Asia Ltd in Hong Kong, told Bloomberg News. “The yuan’s rates at home and abroad will likely converge as well.”