Currency pact confirmed between China and Australia

<p>China and Australia have formed a new currency pact.</p>

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.

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