Magazine article Modern Trader

Renminbi Futures on Globex? China, CME Lay Groundwork to Float Yuan

Magazine article Modern Trader

Renminbi Futures on Globex? China, CME Lay Groundwork to Float Yuan

Article excerpt

Memorandum of understanding (MOU) signings are becoming pretty routine events these days. But with U.S. Treasury Secretary John Snow in attendance the early June MOU signing between the CME and the China Foreign Exchange Trading System and National Interbank Funding Center (CFETS) was more than a mere feather in each organization's cap. If it goes as planned, the MOU could pave the way for the eventual free float of the Chinese currency.

The MOU creates a forum for continuous flow of information and forex expertise between the CME and CFETS. In short, it establishes a dialog regarding a free-floating yuan.

"I view this as an event of far reaching and historic importance," said Treasury Secretary John Snow at a press briefing following the signing. Snow said he sees this as a significant step to China moving towards a more flexible currency. "This is one more of many steps that makes a flexible yuan possible. …

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