China starts direct yuan-sterling trade

China's central bank announced on Wednesday that it has allowed the China Foreign Exchange Trading System to carry out direct trading of the yuan against the sterling as an important move between the Chinese and British governments to facilitate bilateral trade.[Special coverage]

"The direct yuan-sterling trade is good for forming a direct exchange rate between the renminbi and the British pound and reducing exchange costs for market players," the People's Bank of China (PBOC), the Chinese central bank, said in a statement on its website.

The PBOC vowed to give "active support" for yuan-sterling direct trading, saying the use of renminbi and sterling in bilateral trade and investment will also be boosted by the arrangement.

The announcement came after Chinese Premier Li Keqiang started a visit to London on Tuesday.

Earlier this year, China allowed direct domestic trading of the yuan against the New Zealand dollar to encourage such trading as it internationalizes the Chinese currency.