Charles Li says China to allow renminbi to float in five years

The CEO of Hong Kong Exchanges & Clearing Ltd also says China will open its markets further.

Li said China has to reform its interest rate system. He noted that the value of the renminbi is limited by the government and is only allowed to rise or fall within a narrow range. Li said that system can’t last forever.

The proportion of China’s trade conducted in the renminbi has increased to 9% from less than 1% in 2009 when China started a pilot program allowing the use of renminbi to settle international transactions.

Renminbi forwards advanced again on optimism China will implement more currency reforms. The renminbi is trading near a 19-year high against the dollar.

By 2015, China expects a third of its cross-border trade will be settled in renminbi, making the currency one of the three most used in global trading along with the dollar and euro.