Increasing use of AUD, RMB could reduce volatility of currencies, says ANZ

SINGAPORE – ANZ Bank is now projecting that China’s imports from Australia will increase from the current level of US$99 billion to about US$160 billion by 2020. It says this growth will be facilitated by increasing use of both the renminbi and the Australian dollar in bilateral trade.

“Direct currency conversion between Australia and China has already opened the door for creation of an offshore RMB market in Australia,” ANZ says. “Our analysis suggests that using AUD and RMB directly in bilateral trade could help reduce unnecessary global volatility of AUD/USD and potential distortion originating from PBoC fixing for USD/CNY,” ANZ says.  
“The RMB will become a major global currency by 2020.
“While we continue to emphasise the role of trade-related settlement in developing the offshore RMB market in Australia, there is also great potential for both economies to boost financial co-operation by tapping the opportunities from China’s financial reforms - and harnessing China’s capital outflow.  www.live.anz.com (ATI).