Longer trading hours for yuan

BEIJING • The People's Bank of China (PBOC) yesterday said it is extending the yuan's trading hours on the Shanghai-based foreign exchange market from Jan 4.

The Chinese government is aiming to make the yuan a more widely used global reserve currency after the International Monetary Fund admitted the unit to its benchmark Special Drawing Rights basket last month, traders said.

The PBOC will also allow more overseas banks to enter the domestic interbank forex market - the China Foreign Exchange Trade System - which is a unit of the central bank. Trading hours for the yuan will last until 11.30pm local time as of Jan 4 rather than end at 4.30pm. Opening hours will remain unchanged at 9.30am.

"To make the yuan a global reserve currency, you need to make it trade along with other major world currencies," said a trader at a European bank in Shanghai. "This is the first step to move towards making yuan trading hours in line with those of currencies such as the US dollar, euro and yen."

Meanwhile, China's banking regulator is preparing to revoke fund management qualifications for 17 domestic banks, designations that allow the lenders to conduct direct equity investment, financial magazine Caixin reported yesterday, without disclosing the source of the information.

The China Banking Regulatory Commission has given banks informal guidance that their registrations will be removed, Caixin reported.

The move is a setback for Chinese banks, which have been pushing into asset management as a way to address shrinking profits following a series of interest rate cuts.

The 17 banks include China Minsheng Banking, China Everbright Bank, Shanghai Pudong Development Bank, China Zheshang Bank, Bank of Beijing and Ping An Bank.

More firms in China are struggling to repay debt amid the worst economic slowdown in 25 years. The number of firms with more debt than equity has jumped to 913 from 705 in 2007, according to data compiled by Bloomberg.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 24, 2015, with the headline 'Longer trading hours for yuan'. Print Edition | Subscribe