In a sign the currency’s status in international finance is on the rise, and just a few short weeks after China unveiled its Yuan-denominated oil futures contract, the CEO of the London Metal Exchange has confirmed that it is planning to introduce yuan-denominated metal products.
Interest in China’s yuan-denominated oil futures contract has soared since inception…the share of yuan contracts in global trading jumped to 12% compared to eight percent in March and 14% of WTI volume, up from 2% in April.
“The contract is thundering into action,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore, as quoted by Reuters. “It makes sense for Iran to begin selling oil under contracts denominated in yuan rather than dollars.”
Which could explain why, as The South China Morning Post reports, LME CEO Matthew Chamberlain said in an interview in Hong Kong…
“At present, investors are trading our products in US dollars. We would definitely like to explore the possibility of launching products denominated in offshore renminbi,”
The LME, owned by Hong Kong Exchanges and Clearing (HKEX), already allows traders to use the Chinese currency as collateral. HKEX last July has also introduced yuan-denominated gold futures.
Chamberlain could not say when the new products will be launched but he is confident yuan-denominated products would be popular because the currency has become more widely use in global finance.
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