SHANGHAI (Reuters) - China has authorised Australia and New Zealand Banking Group (ANZ) (ANZ.AX) and Westpac Banking Corporation (WBC.AX) to be market makers for direct trading of China’s yuan and the Australian dollar, Australian Prime Minister Julia Gillard said on Monday.
“It’s a good step forward for Australia, it’s a strategic step forward for Australia and our economic engagement with China,” Gillard told reporters during a visit to Shanghai.
Sources told Reuters last week that China and Australia would launch direct trading between the two currencies in Shanghai and Sydney within weeks.
China has launched other new currency pairs in recent years, including with the Canadian dollar, Malaysian ringgit, and Hong Kong dollar, but the exchange rates for these pairs are still calculated based on the corresponding U.S. dollar rates.
China is Australia’s biggest trading partner, with combined two-way trade of $120 billion.
The two countries’ central banks signed a bilateral currency swap worth A$30 billion or 200 billion yuan ($32.27 billion) last March, but the facility has never been used.
The launch of the new Australian dollar-Chinese yuan currency trading pair is another small step in China’s campaign to increase international use of its yuan.
Reporting by John Ruwitch; Writing by Nick Edwards; Editing by Eric Meijer