China to extend onshore FX trading hours until 1530 GMT

China is to issue yuan-denominated sovereign bonds in London for the first time as it seeks a greater role for its currency in global trade and finance, according to people familiar with the matter. Participants outside china will be will be able to clear yuan transactions with Chinese counterparts from 9am to 8pm Bejing time on any working day.

The People’s Bank of China (PBoC) is set to issue government debt in renminbi (RMB) in London.

China is allowing global funds increased access to its domestic capital markets and broadening the range of yuan-denominated investments available offshore as it pushes for the currency to win reserve status at the worldwide Monetary Fund in a November review.

China’s foreign exchange market will “soon” extend the trading hours for the yuan to 11:30 p.m. Beijing time (3:30 p.m. GMT) to overlap with European trading hours, three sources with direct knowledge of the matter said on Wednesday. SDRs are now made up of the United States dollar, euro, yen and British pound and their value is calculated daily in dollars using midday exchanges rates in London, shows a posting on the Washington-based lender’s website.

“It may raise question marks about CNH going forward…and it may mean that over time there’ll be less need for non-deliverable forwards, but we’re still a way from that because they’ve not fully opened the market”, said Ian Gunner, a currency fund manager at Altana in London. “We are going to have more information about market sentiment on the onshore yuan during London hours”.

Banks took an 82 per cent share, followed by funds at 12 per cent and private banks at 6 per cent. Hong Kong ranked fifth with 4.1 percent.

Issuing notes in London will help cement the UK’s place as the yuan trading center for Europe as Paris and Frankfurt, Germany, compete for a share of the market.

Offshore markets in Hong Kong – the largest center of CNH trade – have struggled in the aftermath of a surprise devaluation of the yuan in August.

Chinese President Xi Jinping will visit Britain later this month.

The details of the London issues remain sketchy, but officials said that a few billion renminbi in short-term PBoC notes were likely to be the first move in London.

“In the USA, it’s all about cyber security, investment, trade regulations and standards”, he said.