China on Monday started trading its domestic currency against two new units, the Australian dollar and Canadian dollar, in the latest move to promote greater internationalisation of the yuan.

China has been working to increase use of the yuan and eventually make it fully convertible for international transactions.

The latest move brought the number of currencies traded against the yuan on the tightly-controlled onshore foreign exchange market to nine, according to market operator the China Foreign Exchange Trade System.

But the introduction of the two new currencies attracted little trading interest on Monday, said a foreign bank dealer, who declined to be named.

"There was only one deal for both of the two," the dealer told AFP.

The yuan weakened against both currencies on Monday, he said.

The yuan is also traded against the US dollar, euro, British pound, Hong Kong dollar, Japanese yen, Malaysian ringgit and Russian ruble.

The central bank allows the yuan to move up or down 0.5 percent from its fixed rate to the US dollar each day, but rise or fall three percent against other currencies.

Beijing has also allowed yuan-related financial products in Hong Kong, a semi-autonomous Chinese territory that has been acting as a test bed for the ambitious goal of making the unit a global currency.

A handful of Chinese banks, including the country's largest foreign exchange lender Bank of China, along with several foreign companies including Caterpillar and McDonald's Corp, have issued yuan-denominated bonds in Hong Kong.

channelnewsasia.com