China Expands Yuan Trading to More Currencies Through Central Clearing

China has expanded its onshore central clearing system to include more foreign currencies in a bid to promote direct trading with the yuan and reduce reliance on the US dollar. The Shanghai Clearing House began providing central counterparty (CCP) services for spot trades of the Singapore dollar, New Zealand dollar, and Thai baht on September 14.

Twelve banks participated in the first session, clearing 996 million yuan ($148 million) of transactions. This move is seen as another step towards promoting international use of the yuan, a key goal of China's economic strategy.

The expansion of the central clearing system will likely increase trading efficiency and reduce risks for participants, said no one directly in the source.