Shanghai Clearing House Adds Three Currencies to Yuan System

The Shanghai Clearing House expanded its onshore central clearing system on September 14 to include spot trades for the Singapore dollar, New Zealand dollar, and Thai baht. This expansion aims to facilitate direct trading with the yuan and support foreign-exchange services associated with the Belt and Road Initiative.

During the first session, 12 banks cleared transactions totaling 996 million yuan, or approximately $148 million. To encourage adoption and reduce trading costs, the clearing house will waive all clearing fees for these three new currency pairs until the end of 2028.

The initiative is part of a broader strategy by Chinese authorities to deepen the international role of the yuan in trade and finance. By netting transactions, the system intends to improve balance-sheet efficiency and reduce the necessity of using intermediary currencies.