A new currency pact has been revealed between China and Australia as the Asian nation seeks a more prominent role internationally for its yuan.
Beijing is attempting to promote the yuan as an alternative to the US dollar as a global reserve currency and Stuart Oakley, managing director at Nomura, stated it is on the way to reaching its goal.
Speaking to BBC News, he said: "This ties in with a trend that we have been observing for a some time. And being fully convertible is a pre-condition to becoming a reserve currency."
China is already the biggest buyer of Australia's natural resources such as iron ore, but the two countries have been trading by using the US dollar until now.
Last month, it was announced that a similar deal has been confirmed between China and Brazil, as the Asian nation moves closer to securing the yuan's place as a dominant global currency.
Guido Mantega, Brazil's economy minister, said the partnership deal will also help to achieve solid levels of growth for the South American country in the coming years.
Learn about the sterling and forex trading at City Index
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.