BANGKOK: Thailand’s central bank expects to relax rules on the use of China’s yuan for trade this year to help reduce the impact of currency volatility, a deputy central bank governor said on Thursday.

The Bank of Thailand is in talks with the Chinese central bank on how to promote the use of the currency, Mathee Supapongse told reporters.

China is Thailand’s major trade partner but payments in local currencies are still few, he said.

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There will be no problem with the amount of yuan to be used for trade settlements due to both country’s swap line, Mathee added.

The use of yuan should not be a problem for the United States as the Chinese currency will not be able to play the same role as the U.S. dollar in the short term, he said.

Thailand is encouraging the use of local currencies for trade to help exporters reduce any impact of dollar fluctuations against the baht.