NZ signs historic currency deal with China.

By Adam Bennett

Photo / New Zealand Herald

Photo / New Zealand Herald

New Zealand’s economic ties with China have been strengthened with a deal to allow direct trading of the New Zealand dollar against the Chinese currency the renminbi or yuan.

The deal, struck relatively swiftly negotiations began in April last year, will reduce costs for exporters and importers by removing the necessity for transactions to be settled in two foreign exchange trades via a third currency – usually the US dollar.

Prime Minister John Key and China’s Premier Li Keqiang announced the agreement after meeting at the Great Hall of the People during Key’s first day of an official visit to China this evening.

“It’s great to have been in Beijing to witness the conclusion of negotiations to launch direct trading of the New Zealand and Chinese currencies, which I kicked off during talks with President Xi on the margins of the Bo’ao Forum in April 2013″, Key said.

“I am delighted that the project has been brought to a successful conclusion so quickly.

It highlights the strong relationship and goodwill between New Zealand and China.”

Key said the agreement “will make doing business with China easier by reducing the costs of converting between the two currencies, and will stimulate trade and investment”.

“Direct trading will also increase the integration between the New Zealand and Chinese financial systems, and deepen the economic relationship between the two countries.”

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