Yuan Ascendent: Cross-Border Trade Uses Chinese Currency

From Wall Street Journal:

Three Shanghai companies used the yuan to settle cross-border trade deals for the first time Monday, a step toward promoting broader use of the Chinese currency internationally and, over time, reducing China’s dependence on the dollar.

Bank of China Ltd. settled a trading deal by a unit of Shanghai Electric Group, a manufacturer of mechanical and electrical equipment. Bank of Communications Ltd. settled trades by Shanghai Silk Group Co., a textiles exporter, and by a Shanghai-based trading house whose English name wasn’t available.

Chinese officials have said the yuan-based trade experiment is aimed at helping companies reduce the risks of exchange-rate fluctuations, which have led to significant losses at some exporters recently amid global financial-market turbulence. Officials also have in recent months voiced concerns about China’s dependence on the dollar, which is used for most cross-border deals and which comprises the majority of China’s roughly $2 trillion in foreign-exchange reserves.

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