Wed, Dec 23, 2015 - Page 15 News List

China asks banks to test longer yuan trading hours

Bloomberg

Chinese authorities have asked some banks to conduct test runs for longer trading hours for the onshore yuan, according to people familiar with the matter who asked not to be identified as the matter has not been made public.

The China Foreign Exchange Trading System has told the lenders to run trading tests from 9:30am to 11:30pm in Shanghai from today to Wednesday next week, the people said.

Some banks have also been asked to evaluate their market-making systems tomorrow and on Monday and Tuesday next week. The onshore yuan’s trading currently ends at 4:30pm local time.

ACCESSIBILITY

“China will likely extend the trading hours very soon, probably early next year, now that the authority will be testing the system,” said Li bo, Shanghai-based chief investment consultant at GF Securities Co.

“The currency has gained reserve status, so it needs to be accessible to foreign investors outside of regular Asia hours,” Li said.

An extension will support China’s push to increase global yuan usage after the IMF decided to admit the currency into its Special Drawing Rights. The reserves basket is made up of the greenback, euro, yen and British pound, and their value is calculated daily in US dollar terms using midday exchange rates in London.

The IMF said in August that a market- based representative yuan rate would be needed for the currency’s inclusion.

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