China’s central bank said on Wednesday that the renminbi will be traded directly against the pound sterling in the interbank foreign exchange market, as part of efforts to internationalize the Chinese currency.
“The direct yuan-sterling trade is good for forming a direct exchange rate between the renminbi and the British pound and reducing exchange costs for market players,” the People’s Bank of China (PBoC) said in a statement on its website.
The PBoC pledged to give “active support” for yuan-sterling direct trading, saying the use of the two currencies in bilateral trade and investment will also be boosted by the arrangement.
Sterling will become the fifth foreign currency that can be traded directly against the yuan, joining the US dollar, Australian dollar, New Zealand dollar and Japanese yen.
A separate statement on the China Foreign Exchange Trade System website said the trading will start from Thursday.
The announcement came after Chinese Premier Li Keqiang’s visit to London on Tuesday.
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