China and Australia reach currency deal
April 10 , 2013
The Australian dollar is now the third currency, along with the U.S. dollar and the Japanese yen, to be directly converted into the Chinese yuan.
The move is seen as a major step in China's drive to internationalize its currency.
Beijing is keen to push the yuan as an alternative to the U.S. dollar's role as a global reserve currency.
China is the biggest buyer of Australia's natural resources such as iron ore.
However, without a system to directly convert between the Australian dollar and the Chinese yuan, the two nations have been using the U.S. dollar as a trading currency.
The new deal comes into effect today.
According to economists, there is likely to be a rise in Australian and Chinese companies agreeing on prices in either currency.