The announcement of direct currency trading of the Renminbi between China and Australia was one of several coops of Australian Prime Minister Julia Gillard’s visit to China in early April.
Direct conversion between the yuan and Australian dollar commenced on April 10.
Westpac and ANZ are the first two Australian banks to be granted permission by the People’s Bank of China to start trading of the yuan.
Prime Minister Gillard said direct trading between the two countries was an important step forward in advancing the economic relationship between China and Australia.
“The development of direct trading between the AUD/CNY will over time help lower currency conversion costs, facilitate the use of CNY and AUD in bilateral trade and investment, and promote financial cooperation between our two countries,” Ms Gillard said.
She said developing regional markets to the benefit of Australian businesses was the aim of the Australia in the Asian Century White Paper.
“As China continues to move its economy towards greater financial openness, Australia stands ready as a key trading partner to work with China and to bring our financial markets closer together,” Ms Gillard said.
Mike Smith, ANZ Chief Executive Officer said direct trading between the Australian dollar and the Renminbi was a significant development in relations between the two countries and was an important boost for exporters and importers in both Australia and New Zealand.
“Given China is Australia’s largest trading partner, our largest export market, our largest source of fee-paying students and tourists this agreement is timely and with our new licence we look forward to offering direct settlement to our customers in both markets,” Mr Smith said.
Gail Kelly, Westpac Group’s Chief Executive Officer, said Westpac had long supported the development of direct trading between the Chinese yuan and the Australian dollar.
“This announcement is an important step. It helps make trade with China more efficient and contributes to Australia’s opportunities in the Asian Century,” Ms Kelly said.
Australian becomes the third country after the United States and Japan to have its currency directly converted to the RMB. ■
(Picture top left reproduced courtesy Jamie Mi)
