China’s central bank said Wednesday that it will extend the yuan’s trading hours in the domestic market, a move that could help narrow the gap in the currency’s onshore and offshore rates.
From Jan. 4, the hours for buying and selling the yuan on the mainland will be extended to 11:30 pm local time, from the current 4:30 pm, the People’s Bank of China (PBoC) said.
The longer trading hours are in keeping with Beijing’s efforts to make the yuan’s exchange rate more market-oriented and to further open the Chinese markets to foreign investors, the PBoC said, according to the Wall Street Journal.
The move to extend the trading hours came after the International Monetary Fund decided late last month to add the yuan to its reserve currency basket.
Chinese officials have said the reserve-currency status could lead to greater foreign demand for the yuan.
Extending the trading hours could help bring in more participants in yuan markets, the central bank said Wednesday.
Longer trading hours could also help narrow the gap between the currency’s exchange rates in the onshore and offshore markets, the PBoC said.
Even after the trading hours are extended, the PBoC will base the yuan’s closing level on its rate against the dollar at 4:30 pm local time.
The bank uses the closing level to help determine the official rate it sets for the next day.
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