Moscow to put Chinese yuan on equal footing with dollar and euro !!!
Moscow to put Chinese yuan on equal footing with dollar and euro
October 22, 2012
RBC, Combined report The exchange is planning to introduce yuan-based instruments with ”tomorrow” settlements as well as currency swaps as early as the beginning of 2013.
Some of the forex trading terms and conditions applied to convertible currency (US dollar and euro) instruments will be extended to the yuan. Photo: AP
The Moscow MICEX-RTS Exchange will expand its list of yuan trading instruments in the first quarter of 2013. Managing Director of Money Market Business Section Igor Marich said at a presentation of yuan transactions at the exchange that some of the forex trading terms and conditions applied to convertible currency (US dollar and euro) instruments will be extended to the yuan.
The exchange is planning to abandon its 100% advance deposit rule for yuan trading in favour of a partial deposit. According to Marich, the exchange currently requires advance deposits only to the extent of risk involved for other instruments, which normally amounts to 5% of client’s funds. Now the yuan is expected to receive the same treatment.
The CNY/RUB currency pair is now traded only on ”today” settlement terms, and trading takes place for just one hour per day, from 10.00am til 11.00am Moscow time, with a 100% advance deposit requirement. The exchange is planning to introduce yuan-based instruments with ”tomorrow” settlements as well as currency swaps as early as the beginning of 2013. The trading time window for those instruments will increase accordingly. Regular trading hours will be from 10.00am to 7.00pm Moscow time, while the after-hours session will last until 11:50pm Moscow time.
Marich pointed out that it would be possible to use offshore accounts to settle exchange-traded transactions. He expressed confidence that the planned changes would substantially increase the size of yuan instrument trading at the exchange.
The MICEX first launched yuan trading in late 2010.
Russia’s prime minister, Dmitry Medvedev, called the yuan one of the most promising future reserve currencies at the international CIS investment forum in Yalta in September 2012.
“Our Chinese friends have yet to decide on making their currency convertible, but as soon as they do, make no mistake: all present and absent counties will denominate their reserves in yuan,” Medvedev said.
The yuan could become an IMF reserve currency in the future if the Chinese government undertakes further economic reform, International Monetary Fund Managing Director Christine Lagarde said in March 2012.