China is launching yuan swaps, forwards vs rouble, ringgit, NZ dollar

[SHANGHAI] China will launch swaps and forwards between the yuan and the Russian, Malaysian and New Zealand currencies next week, a move traders said offers mainland companies a hedging tool at a time some emerging market currencies have seen sharp volatility.

The China Foreign Exchange Trade System (CFETS), a unit of the Chinese central bank, said it will kick off the currency swaps and forwards between the yuan and the rouble , ringgit and the New Zealand dollar on Monday.

The contrasts will have a minimum trading size of US$10,000 equivalent, CFETS said in the statement published on Friday in its website, www.chinamoney.com.cn.

Currencies in emerging markets, in particular the Russian rouble, have fluctuated sharply in recent months, partly battered by a plunge in global crude oil prices.

China, whose currency is not convertible under the capital account, has been gradually reforming its currency mechanisms to move towards a full convertibility as it tries to internationalise the yuan.

The yuan is already traded in swaps and forwards against major global currencies of the dollar, the euro, the yen , the sterling and Hong Kong dollar.

REUTERS