China said to ask banks to prepare for longer yuan trading hours

CHINA plans to extend the yuan’s trading hours as it seeks to increase global investor participation in onshore currency trading as part of its internationalisation push.

Regulators led by the People’s Bank of China (PBOC) have told some banks to prepare for an extension of onshore yuan trading hours, according to people familiar with the matter, who asked not to be identified discussing private information. The trading will close at 3 am the next day, instead of the 11.30 pm local time, the people said. It’s not known when the change would be effective.

The PBOC had pledged to extend currency trading hours and vowed to further open up the financial market in May after the International Monetary Fund lifted yuan’s weighting in the Special Drawing Rights currency basket. China last tweaked yuan trading hours in 2016 when it extended trading by 7 hours.

The PBOC and State Administration of Foreign Exchange didn’t immediately reply to faxes seeking comment.

The onshore yuan has depreciated nearly 5 per cent versus the dollar this year as the economy suffers due to Covid-led curbs and as the PBOC’s accommodative stance at a time when the Federal Reserve is hiking rates drives outflows. BLOOMBERG