China to launch Gold International Board in Shanghai FTZ

SHANGHAI – The People’s Bank of China Shanghai Head Office and Shanghai Gold Exchange have announced that China will launch a gold international board in the Shanghai Free Trade Zone (FTZ) for international investors, using RMB as the pricing and trading currency. The gold international board will be attached to the free trade accounting unit (FTU), and four local banks will provide the settlement service for investors.

Qualified investors in the offshore market and FTZ will be able to open free trade accounts with the four banks to trade gold. ANZ Bank says the move is a milestone for China’s RMB internationalisation, and will facilitate China’s capital account openness over the long term. Meanwhile, it will help increase China’s influence in global commodity pricing, as China is the largest gold consumer and importer in the world.
“As the gold international board in the FTZ will be attached to the FTU system, it will increase the use of offshore RMB,” ANZ says. In addition, gold prices in the onshore and offshore markets will tend to converge gradually as the international board increases interactions between onshore and offshore investors.” 
The PBoC has approved a China Foreign Exchange Trade System (CFETS) to start CNY-GBP direct trading in the interbank market. The launch of CNY-GBP direct trading had been expected, as China and UK agreed on direct conversion between their currencies when British Chancellor George Osborne visited China in October 2013.
The PBoC will authorise China Construction Bank’s London branch to be the clearing bank in the UK, which is China’s 12th largest trading partner, with bilateral trade reaching US$70 billion in 2013. www.live.anz.com (ATI).