SEOUL, Mar 13: South Korea plans to launch yuan-won futures contracts as early as June as part of its efforts to boost activity in Seoul’s new yuan-won market , according to sources at the finance ministry and Korea Stock Exchange with knowledge of the matter.
The futures contracts would be traded in 100,000 yuan units, one of the sources told Reuters on Friday. Currently there are futures contracts for exchange rates with the South Korean won in the U.S. dollar, the euro and the Japanese yen. Vice Finance Minister Joo Hyung-hwan said on Friday at a seminar in Seoul that there should be a variety of financial products available for investors in order to bolster the yuan-won market. Joo did not comment on futures at the event. The two Asian trade giants pushed hard for direct trading in Seoul, with China looking to boost international use of the yuan , while South Korea wants to be among the global hubs for increasing yuan-related business.
After the yuan-won market was launched on Dec. 1 last year, average daily trade has stood at $950 million, although most of it has been activity from local banks selected as market-makers. The finance ministry source told Reuters it was a problem that businesses were not actively participating in the yuan-won market, despite government efforts to prop up trade. Activity is expected to increase, however, as South Korean tech giant Samsung Electronics Co Ltd said on Thursday it will start buying or selling the Chinese yuan for the won from the Seoul market on March 16.
Joo told reporters on the sidelines of the seminar that other businesses were showing interest in joining the market, but did not disclose where.
(AGENCIES)
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