Talks on renminbi trading

New Zealand officials are in talks with their Chinese counterparts to make dollars directly convertible with Chinese renminbi, a spokeswoman for Prime Minister John Key said yesterday.

Currency convertibility would help traders in both countries as it would remove the need to convert either renminbi or dollars into US dollars to execute import and export transactions.

The spokeswoman said Key and China's leaders had agreed on the desirability of investigating kiwi-renminbi convertibility when he was in the People's Republic recently.

"However there is no timeframe for concluding an agreement," she said, adding that it took Australia around 12 months to achieve its currency agreement with China.

Statistics New Zealand said last week that exports to China rose 26 per cent to $654 million in April from a year earlier.

China has become increasingly important to NZ exporters and receipts have tripled since the nations signed a free trade agreement in 2008.

The Chinese authorities have introduced reforms during the past few years aimed at increasing the use of the renminbi in international trade and investment. Australia last month became the third country in the world that capable of trading its currency directly with the renminbi, following the United States and Japan.APNZ