Standard Chartered Bank China said on Thursday that it had received approval from China's central bank, the People's Bank of China, to be in the first batch of market makers for direct trading of yuan against British pound.
The bank made its first yuan-pound direct trading deal with the Bank of China on China's interbank foreign exchange market after the opening of Thursday's trading.
Direct trading between the RMB and the British pound has been started in what's being seen as a significant step forward in the internationalization of the Chinese currency. Direct trading ends the need for companies to convert pounds or yuan into a third currency when making payments.
A central parity of the yuan against the pound will be announced daily by the central bank. The currency is expected to gain further traction due to guarantees of international trade denominated in the RMB by Britain's trade finance body, UK Export Finance.
"With all of the banks having more liquidity in the direct trading, for Sterling and RMB, we would think that the positive effects will be rolling over to banks' customers. So, they would soon benefit from the efficiency and cost-saving for converting RMB or Sterling into other currency." Wang Yan, Assist. General Manager of Bank of China London Branch said.