China has taken another step closer towards internationalising the RMB as the Australian dollar will be directly convertible into the yuan and vice versa from 10 April.

Australia is the third country to have such an arrangement with China, where currently, only the US dollar and Japanese yen are directly exchangeable with the RMB. Australian Prime Minister Julia Gillard said the country's banks, superannuation funds and financial houses will be even better placed to help the growth of China's service economy.

As part of its aims to internationalise the RMB, the Chinese authorities are actively courting governments and central banks around the world. Already globally, 12% of China's trade is now settled in RMB and, not surprisingly; many analysts are predicting that the RMB is likely to be the world's third largest most actively-traded currencies around the world, behind the US dollar and the euro with estimated trading volume of around $1trn a day.