China Expands Yuan Clearing to Three More Currencies

China has taken another step towards promoting the global use of its currency, the yuan. The Shanghai Clearing House began offering central counterparty (CCP) services for spot trades in three new currencies: the Singapore dollar, New Zealand dollar, and Thai baht. This expansion is part of China's efforts to reduce reliance on the US dollar in international trade.

Twelve banks participated in the first session, clearing 996 million yuan (approximately RM600.8 million) in transactions. Bosco Wu, a strategist at the Bank of East Asia, said that this move will encourage more banks to quote actively and deepen liquidity in RMB/SGD, RMB/THB, and RMB/NZD.

The Shanghai Clearing House will waive clearing fees for these new currency pairs through 2028 to help lower trading costs. This expansion may pave the way for more currencies to be cleared directly against the yuan as Beijing seeks to broaden its global use.