Here comes the petro-yuan - SupChina

Here comes the petro-yuan

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The Wall Street Journal reports (paywall) that “China is preparing to launch its own yuan-based oil futures contract, a move set to shake up the 96 million barrel-per-day global crude market currently dominated by trading in London and New York.”

  • No official launch date has been announced, but “traders and analysts in China say they expect trading in it to begin late this year or in early 2018.”
  • The WSJ says the move could “challenge the role of the U.S. dollar — currently the dominant commodity-pricing currency — by making it possible for crude exporters to sell the oil in another currency.”
  • However, the chaotic state of China’s existing commodities futures markets and the government’s record of frequent interference in domestic financial markets are likely to “arouse wariness among foreign participants.”

Jeremy Goldkorn

Jeremy Goldkorn worked in China for 20 years as an editor and entrepreneur. He is editor-in-chief of SupChina, and co-founder of the Sinica Podcast.

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