Gillard May Seek China Currency Deal, Australian Reports

Prime Minister Julia Gillard may seek a deal enabling direct conversion of Australian dollars into Chinese currency when she visits China next week, the Australian newspaper reported today.

Gillard will attend the Boao Forum, which runs from April 6 to April 8, and visit cities including Shanghai and Beijing, the Australian newspaper reported, without saying where it got the information. Darrin Barnett, a spokesman for the prime minister, confirmed Gillard would attend the forum, declining to comment on the currency conversion deal or full itinerary.

China remained Australia’s top trading partner in January, even as transactions slid to A$9.9 billion ($10 billion), the lowest since September, according to figures from the government’s statistics bureau. Australia’s business sector has been seeking a deal for some time and a pact will help reduce costs, said Arthur Sinodinos, shadow parliamentary secretary to the leader of the opposition, according to the Australian Broadcasting Corp. website.

The Australian dollar closed at $1.0419 in Sydney yesterday. It rose 1.8 percent last year against the greenback. The so-called Aussie has surged as demand for the nation’s resources from China and India set off a record mining boom.

Internationalization of the yuan, China’s currency, is in the interests of Australian businesses and the nation’s economy, Treasurer Wayne Swan said in July. Japan last year started to use its currency in direct trading with China.

The central banks of China and Australia signed a A$30 billion currency swap agreement to ensure the availability of capital between the trading partners, the Reserve Bank of Australia said in March 2012.

Before it's here, it's on the Bloomberg Terminal.