Finally, for a number of years now, the Australian dollar has been directly traded against the RMB in the onshore FX market. This has allowed for the growing use of RMB in Australia. That said, the use of RMB remains noticeably less than the value of trade between China and Australia.
In the RBA’s conversations with Australian businesses that trade with China, one repeated concern raised that inhibits greater use of the RMB is the limited scope to hedge. In that regard, it is pleasing to see that RMB hedging instruments and markets are growing rapidly. The ability to hedge was a very important development in the internationalisation of the Australian dollar.