Wednesday, November 1, 2017

RMB internationalization continuing through gold markets as mainland to connect with Hong Kong

Besides the Silk Road initiative and bi-lateral trade, it appears that the gold markets will become the next conduit to help spread the Yuan currency out onto the international financial system.

On Nov. 1, it has been announced that on Friday the Shenzhen gold market will connect with Hong Kong's gold market to boost cross border trading as well as help expand the RMB further into international markets.

A new gold connect scheme will be launched on Friday to link up the Hong Kong and Shenzhen gold markets, giving a boost to cross border bullion trading and the ongoing internationalisation of the yuan, according to the local gold bourse head. 
The Shenzhen-Hong Kong gold connect will be the second cross border trading scheme after the Hong Kong and Shanghai gold markets were linked in 2015, according to Haywood Cheung Tak-hay, president of the Chinese Gold&Silver Exchange Society. 
The Shenzhen and Hong Kong gold connect has 70 Hong Kong gold trading firms taking part, compared to 30 in the Shanghai-Hong Kong connect. The Shanghai-Hong Kong gold connect only allows Hong Kong investors to trade the Shanghai gold exchange, while the Shenzhen leg only allows mainlanders to trade gold in Hong Kong. -  South China Morning Post
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