Financial institutions of Korea, China push for direct won-yuan tradingUpdated: 2014-07-08 07:24:41 (KST)
One of Korea's biggest financial firms Woori Bank is expected to be in charge of promoting sales and marketing for the Korean branch of China's Bank of Communications.
The head of the Bank of Communications, which was appointed as the Chinese yuan clearing bank in Seoul just last week, predicts the amount of transactions settled in yuan by Korean businesses will nearly quadruple to 300-billion yuan, or roughly 48-billion U.S. dollars a year in the near future.
Analysts say this falls in line with China's push for increasing the use of renminbi by banks and businesses in international transactions.
The Hyundai Research Institute says China's currency is increasingly preferred to the Japanese yen in global trade, thanks to its large economic scale and stability.
The Korea Institute of Finance also says as of October last year, the amount of global trade financing settled in Chinese yuan stood at nearly 9 percent, outpacing the Euro and the yen and points out that the rate of the yuan's internationalization is 48 times faster than the yen's in the 1980s.
In Korea expectations are high that President Park Geun-hye and Chinese leader Xi Jinping's agreement last week to soon let the two countries' businessmen settle their trade bills in their own currencies will encourage more direct won-yuan trading.
However, some experts also warn the growing presence of the yuan will deepen Seoul's economic dependence on Beijing though, it could help ease pressure on the Korean won's appreciation against the dollar.
Laah Hyun-kyung, Arirang News.
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