China will extend the trading hours for the onshore yuan as the government pushes ahead with plans to internationalize the currency.
(Bloomberg) — China will extend the trading hours for the onshore yuan as the government pushes ahead with plans to internationalize the currency.
Onshore yuan trading will close at 3 a.m. local time the next day rather than 11:30 p.m., effective from Jan. 3, according to the People’s Bank of China. Opening hours will remain unchanged at 9:30 a.m., the PBOC said.
The move will further open up China’s markets at a time when the yuan has rallied on signs the country is moving away from its strict Covid Zero policy. The onshore yuan rallied in the last two months of 2022 to near the strongest level since September. The central bank last extended currency-trading hours in 2016.
The PBOC pledged to extend the trading time in May after the International Monetary Fund lifted the yuan’s weighting in the Special Drawing Rights currency basket, an international reserve asset that can be converted into five currencies. The yuan was initially included in SDR in 2016 after years of effort by Chinese authorities to promote its global use.
Regulators led by the PBOC had told some banks in June to prepare for an extension of onshore yuan’s hours, according to people familiar with the matter at that time. Trading would run to 3 a.m. the next day, the people said.
The central bank kept the timing of the “official close” unchanged at 4:30 p.m. The figure is used by CFETS as an important reference to price the yuan’s fixing for the following day.
–With assistance from Philip Glamann.
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