Dubai Gold and Commodities Exchange to launch Chinese Yuan futures

The Dubai Gold and Commodities Exchange (DGCX) will soon launch Chinese Yuan futures to further strengthen the status of Dubai as a global trading centre, its CEO has said. The exchange, launched in 2005, was the first in the world to launch Indian Rupee-US Dollar futures, which they launched in 2007. “That was a big move,” Gaurang Desai told 7DAYS. “Today we are the largest trading venue for USD-INR futures with an average volume of $1.5 billion to $1.8 billion everyday. Very soon we plan to launch Chinese Yuan futures that is in line with internationalisation of Chinese currency and is supported by Chinese banks and institutions. “We have made a lot of partnerships with regional markets and participants like Pakistan Mercantile Exchange, Borsa İstanbul, Turkey, and we’re looking at launching currencies like Pakistani Rupee and Turkish Lira in that space.” The move is part of “a strategic initiative the Chinese government has taken to pull up their currency”. “So we’re one of the partner exchanges in that respect,” Desai added. The move is aimed at boosting the exchange’s status as well as providing Chinese businesses an opportunity. The CEO explained: “Dubai plays a very vital role in the development between Africa and China. If you look at the development of Dubai, we now have something like 300,000 Chinese living here – so there is a lot of latent demand coming here to hedge the risk. “A lot of Chinese companies are setting up their regional shop here, so again from that perspective it makes sense for them to have a product which can offset their global revenues and exposure.They have already done it in Hong Kong and Singapore, Dubai is next. “It adds to the stature of Dubai as a global trading centre because now we are on par with Hong Kong and Singapore.” The Yuan contracts could also help fuel more Chinese investment in the UAE. “I would expect that by having a venue to offset your risk it will facilitate a lot of Chinese businesses to come here and trade more often or use this vehicle for their needs,” Desai said. The China-Arab States Cooperation Forum last year heard that UAE-China trade for 2015 is forecast to reach $60 billion. megha@7days.ae