Photo: Kai Pfaffenbach / Reuters
China March 26, will start trading oil futures in yuan, according to the Chinese Commission on regulation of the securities market.
According to Bloomberg, foreign investors for the first time will have access to Chinese commodity market. If they accept futures in yuan as a benchmark of the market, this will undermine the dollar as the leading currency of oil trade, the Agency said.
However, the interviewed experts believe that it is not the immediate future. In addition, if investors agree to make payments in Renminbi, world prices for oil will still go in dollars. In addition, pointed out by Bloomberg, traders will have to face the strict control of capital movements in China.
Bloomberg notes that in 1993 China has launched trading in oil contracts in yuan, but closed it after a year due to high volatility.
By the end of 2017, China has become the world’s largest importer of oil, overtaking the United States. Chinese purchases totaled 8.4 million barrels per day. Hydrocarbon supplies to China have increased including Russia. At the same time Russia sends the Chinese a higher quality oil than in Europe: European consumers began to complain about the high sulphur content of Urals.
Video, photo All from Russia.