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A new program allows some importers and exporters to settle trade in China's currency, Yuan, beginning this week. Kelvin Lau is the regional economist at Standard Chartered Bank Hong Kong. He says the agreement allows business in Hong Kong, a Chinese territory, to carry out more business in the Yuan, or CNY, and this should help earnings. "All these will help Hong Kong to complete its business capability and to make it achieve the longer term goal of being China's offshore CNY financial center." Lau says this is a step towards making the Yuan a reserve currency in Asian banks. It should also cut foreign exchange costs for exporters and importers, who before had to settle trade deals with Chinese companies in foreign currencies, usually dollars. The People's Bank of China and the Hong Kong Monetary Authority agreed on the program last week. |