China, Singapore to allow direct trading between currencies

SINGAPORE, Oct 22 (AFP): China and Singapore have agreed to allow direct trading between each other's currency, Singapore's central bank said Tuesday. The move, along with other agreements on financial cooperation, is expected to bolster Singapore's status as a leading offshore trading centre for the Chinese yuan, officially called the renminbi (RMB). "China and Singapore will introduce direct currency trading between the Chinese yuan and Singapore dollar," the Monetary Authority of Singapore (MAS) said in a statement, adding that details will be announced separately. The statement was issued after a meeting between senior officials from both countries led by Singapore Deputy Prime Minister Teo Chee Hean and visiting Chinese Vice Premier Zhang Gaoli. China will also grant Singapore-based investors a 50 billion yuan ($8.2 billion) investment quota under its Renminbi Qualified Foreign Institutional Investor programme, MAS said. This would allow investors based in the city-state to use the yuan to invest in Chinese stocks and bonds. The programme "will help to diversify the base of investors in China's capital markets and promote adoption of the RMB for investment", MAS said.