BRICSPost: Analysts hail yuan-euro direct trading announcement

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September 30, 2014, 8:20 am

A staff member counts money at Matou Town Rural Credit Cooperatives on June 20, 2011 in Linyi, Shandong Province of China [Getty Images]

Analysts have given the thumbs up to the Chinese central bank’s announcement on Monday that the Chinese currency can now be traded directly against the euro in its interbank currency market.

This would be a major boost to trade between China and the Eurozone, says Nordea. China stepped up plans to increase the international use of its currency last October with an agreement between the European Central Bank and the PBOC to swap euros and yuan.

“From today, the USD is no longer needed for trading between CNY and EUR. The two currencies can be traded direct against each other. This would lower transaction cost in EURCNY trading and push for yuan internationalization,’ said Amy Yuan Zhuang, senior Asia analyst at Noredea Research.

The yuan is now the second most-used currency in international trade after the US dollar.

“Implications for European companies are beneficial in…

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