China is very likely to give the green light to companies in Yunnan Province and Guangxi Zhuang Autonomous Region to settle international trade in yuan with Southeast Asian countries, according to statements on June 30.
The scheme will protect exporters from currency fluctuations and help boost trade with the 10-nation Association of Southeast Asian Nations, Nong Rong, vice secretary general of the China-ASEAN Expo, was quoted as saying by Bloomberg News.
"Preparation work for the pilot programs are progressing smoothly," Nong was quoted as saying.
"Some companies that were deterred by foreign-exchange risks may now seek to expand overseas as the risks have been reduced," Nong added.
China and ASEAN have held the annual trade fair in Nanning, capital of Guangxi, since 2004.
The yuan settlement is expected to help stabilize trade, trim currency exposure for exporters and build up the yuan's position in the international monetary system, which now centers on the United States dollar. Chinese exporters can avoid foreign currency exposure by settling in yuan.
China announced late last year that it planned a trial for settling international trade in domestic currency.
Source: Shanghai Daily