China, Australia mulling direct currency trading

Chinese and Australian central banks are considering to launch direct trading between the yuan and the Australian dollar, China's central bank governor said Sunday. If the deal is reached, the Australian dollar would be the third major currency allowed to be traded directly against the Chinese currency, following the U.S. dollar and the Japanese yen. Other major currencies that have been used as intermediaries for the China-Australia currency trading are sometimes instable, said Zhou Xiaochuan, governor of the People's Bank of China. The bilateral trade, investment and tourism relations between China and Australia have developed rapidly in past years, resulting in growing demand for the direct currency trading, Zhou told reporters at a group interview on the sidelines of the 18th National Congress of the Communist Party of China. The Chinese and Australian central banks support the direct trading, said Zhou, adding that such a direct trading would be "a good thing, a matter of course and a choice that respects the market." China announced in May the direct trading of its currency against the Japanese yen, bringing the yuan one step closer to a truly global currency. China has been taking steps to internationalize the yuan, facilitating the use of the yuan in cross-border trading and investment, and signing currency swap agreements worth at least 1.5 trillion yuan (238 billion U.S. dollars) with a dozen of countries.