The NZ$ joined 5 other currencies that can be directly traded with the Renminbi (CNY) – the others being:
US Dollar – Japanese Yen – Malaysia Ringgit – Russian Rouble – Australian Dollar
What does it mean for trade:
There is now no requirement to exchange NZ$’s in the foreign exchange into another currency that is directly tradable (usually the US$) and then have to go back into the foreign exchange with that currency in order to obtain Renminbi. This will save importers and exporters foreign currency fees as well as one less transaction. However the losers will be foreign exchange dealers – interesting to note that John Key (former foreign exchange dealer) announced the deal last night during the first day of his visit to China. The diagram below shows the old system which requires double access into the foreign exchange. Under the new system arrows 1 and 2 will be removed and 3 will now be NZ$ going into the foreign exchange.