WESTPAC and ANZ have been granted the rights to directly trade Australian dollars and Chinese Yuan as part of an agreement to directly trade the two currencies on the Chinese mainland.
The currency deal, which will be formally announced tomorrow, will make the Australian dollar only the third major currency to be directly traded with the Yuan on the Chinese mainland.
The two big Australian banks will be granted maker status.
ANZ managing director Mike Smith said the market would start small but could quickly rise to the billions.
Julia Gillard said the agreement would lay an important foundation stone for the future,
The deal will allow direct trade between the Australian dollar and the Yuan and take away the need to convert to US dollars in international deals.
The deal will save companies a few basis points, according to Mr Smith.
”This is a huge advantage for Australia,” Ms Gillard told reporters in Shanghai on Monday.
Ms Gillard said the agreement, which will be formally announced on Tuesday in Beijing, followed months of negotiations.
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