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Yuan trade settlement deal is close

(Xinhua)

21:32, October 23, 2011

China is working on an agreement with the Association of Southeast Asian Nations to settle trade in yuan, an official with China's central bank said yesterday.

"It's currently underway," Jin Qi, assistant to the governor of the People's Bank of China, said when asked to comment on recent reports that China and ASEAN will sign a yuan-denominated trade settlement agreement.

She made the brief remark on the sidelines of the third China-ASEAN Summit Forum on Financial Cooperation and Development held in Nanning, capital city of the Guangxi Zhuang Autonomous Region.

The framework agreement between China and ASEAN, which is likely to be signed late this year or early next year, will pave the way for banks in China and ASEAN countries to start exchanging yuan for ASEAN currencies, according to a Reuters report quoting anonymous sources.

Analysts said a China-ASEAN agreement on settling trade in yuan would benefit the region, largely due to the stability of the yuan.

Once signed, such an agreement would greatly boost China-ASEAN trade, investment and other aspects of economic cooperation, Bank of Communications chief economist Lian Ping said.

"The US dollar has been the dominant currency in payment and settlement in this region but will certainly become volatile in future," said Lian. "If a stable currency like the yuan can play a bigger role in the region, it will be good for both trade and regional financial stability."

The yuan has appreciated about 30 percent against the US dollar since July 2005, when China scrapped the yuan's peg to the greenback and adopted a managed-floating currency system, according to a central bank report released earlier this month.

China has pledged to increase the yuan's flexibility, while stressing that exchange rate policy will be reformed in a gradual manner and the currency's basic stability will be maintained.

The government has pushed for the internationalization of the yuan by encouraging the use of the currency in cross-border trade and investment settlement.

In her speech yesterday, Jin urged advancing bilateral yuan-denominated settlement between China and ASEAN to make regional trade and investment more convenient.

"We should speed up the work of signing and improving bilateral agreements on local currency settlement," she said.

She also called for active efforts to allow trading between yuan and ASEAN countries' currencies on inter-bank foreign exchange markets in China and ASEAN member countries.

China and ASEAN have seen stable growth in cross-border trade settlement in yuan, said Jin, who noted that there are now more than 30 banking institutions set up by ASEAN members in China.

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  1. Name

helen at 2011-10-2460.51.30.*
Excellent!Time for more and more sovereign nations to trade in non-US$ and put a stop to US "parasite existence" bent on making a mockery and fools of those who export to the US and held their foreign reserves in Weimar US$!A wake up call to those still in slumber ....
Canada at 2011-10-2470.36.49.*
For China"s information. ‘We continue our resistance to full revenge. I am in Libya, alive and free’ – Gaddafi’s sonPublished: 23 October, 2011, 12:47Edited: 23 October, 2011, 21:02 The son and one-time heir apparent of the late Colonel Gaddafi, Saif al-Islam, is still in Libya. He is free and will go on with the resistance, he reportedly claimed in an address to supporters aired by Syria’s Arrai TV Channel.?“We continue our resistance. I am in Libya, I am alive, free and intend to go to the very end and exact revenge,” Russia’s RIA Novosti news agency quotes Saif al-Islam as saying on Saturday night on the Syrian Channel, which remains loyal to the Libyan ex-leader.“I say go to hell, you and NATO behind you. This is our country, we live in it, we die in it and we are continuing the struggle,” Saif al-Islam said, according to Al-Arabiya news channel.“I received a message from tribes in Bani Walid about a general consensus between them to respond to threats from the gangs of rats ─ the revolutionaries and the NATO alliance,” Saif al-Islam said.Earlier contradictory reports suggested Saif al-Islam Gaddafi has been either killed or captured in the western Libyan town of Zliten and was in the hands of the country’s National Transitional Council.Egypt’s Nile TV Channel reported on Thursday, October 20, that he had managed to flee Sirte and find shelter in the desert. According to RIA Novosti, Saif al-Islam Gaddafi has already got the support of the tribes loyal to his father, who promised to fight against the current government and take revenge for the killing of the colonel and his son Mutassim. Some experts now suggest the Libyan conflict could now be prolonged and grow from a political into an interethnic struggle.Thirty-nine-year-old Saif al-Islam is the second son of Muammar Gaddafi and carried out public relations and diplomatic roles for his father. Western-educated and the most-recognized Libyan official, he was often viewed as Colonel’s successor and a possible reformer.
  

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