China will soon be able to trade oil using its own currency by creating a futures market to rival the international benchmark contracts which are traded exclusively in dollars.
C hina will soon be able to trade oil using its own currency by creating a futures market to rival the international benchmark contracts which are traded exclusively in dollars.
The China Securities Regulatory Commission confirmed its plans to begin the trade of yuan-based oil futures on the Shanghai Futures Exchange from March 26 on Friday.
China is now the world’s largest crude importer which is understood to be a large part of its drive to establish a benchmark which reflects its local market and offers its mega refineries more clout.
China’s long-held appetite for its own crude futures market is highly controversial in large part because it upends a raft of legacy precedents in the market which has always relied on benchmarks based on futures contracts traded for Brent crude or the West-Texas Intermediate.
