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China will start trading yuan against the Malaysian currency ringgit from tomorrow, taking a new step in the effort to internationalize its currency.
The move will help promote bilateral trade between China and Malaysia, the China Foreign Exchange Trading System said on Wednesday in a statement on its website. It reflects China's intention to increase the role of yuan in international trade.
Yesterday, China announced a pilot programme that will allow overseas banks to invest yuan holdings in the country's interbank bond market. Under the scheme, the Renminbi Clearing Bank and other participating banks of RMB business in Hong Kong can conduct trading in the Mainland's interbank bond market upon approval by the People's Bank of China.
The PBoC on June 19 ended a two-year peg to the U.S. dollar, while ruling out a large one-off revaluation in the yuan. It was done after increased international criticism that China has significantly undervalued its currency to boost its exporting sector during the height of financial crisis.
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