Polish zloty traded in China

China is launching direct trading pairs of yuan and seven foreign currencies, including zloty, Bloomberg informs.

A statement from Chinese financial market regulator says: “In order to promote bilateral trading and investment between China and Poland, facilitate the use of renminbi and zloty in cross-border trading and investment settlements and meet the needs of economic entities with regard to lowering the costs of currency exchange, upon consent from the People’s Bank of China, as of 12 December 2016, there will be launched direct trading between RMB and PLN on the interbank market”.

This means quotations of zloty both on the cash market and forward market (forward and swap transactions) will appear on the Chinese interbank market. Every bank in China with access to the currency market will be able to perform direct exchange of yuan to zloty and the other way around. Market animators will be responsible for improving the liquidity of the CNY/PLN pair.

However, the market will not be free. The CNY/PLN rate during the day will be allowed to change no more than 5% against the central rate established by PBC.

At the same time, the Chinese allowed direct trading in six other currencies: Swedish crown, Danish crown, Norwegian crown, Turkish lira, Mexican peso and Hungarian forint.

For several years, the rulers of the People’s Republic of China have been consequently maintaining the policy of internationalising yuan. Thanks to this, the Chinese currency is slowly gaining importance in international trading.