China's central bank said on Wednesday it would extend the yuan's trading hours on the Shanghai-based foreign exchange market from Jan. 4, in a major step forward on reforms that will help onshore and offshore rates converge.
The extension will also allow trading in the Chinese forex market to overlap with European trading hours in Beijing's latest effort to internationalize its currency, traders said. Reuters cited the central bank's plans to extend trading hours, in October, citing market sources.
The government is aiming to make the yuan a more widely used global reserve currency after the International Monetary Fund announced the yuan's admission into its benchmark Special Drawing Rights basket in November, traders said.
"To make the yuan a global reserve currency you need to make it trade along with other major world currencies," said a trader at a European bank in Shanghai.
"This is the first step to move towards making yuan trading hours in line with currencies such as the dollar, euro and yen."