China Foreign Exchange Trade System (CFETS) announced that, as authorized by the People's Bank of China, it would carry out direct trading of RMB against the Euro in the interbank foreign exchange market since September 30, 2014. The formation of the central parity rate of the RMB against the Euro would be changed to the direct trading market-maker quotation instead of the previous cross rate based on the central parity rate of the RMB against the US dollar and the exchange rate of the US dollar against the Euro on that day.

 

Before that, direct transactions have been launched for the RMB against currencies such as the Malaysian Ringgit, Yen, Australian Dollar, New Zealand Dollar and Pound. A number of industry and academics said that the direct transaction between the RMB and the Euro would help to promote the bilateral trades and investments between China and the Eurozone member states and facilitate the use of the RMB and the Euro in trade and investment settlements, and it could also meet the requirements for the costs of conversions among economic subjects.