China announced it will start direct trading with the Swiss franc. This is another step in China’s relentless march toward becoming a major player on the world financial stage and away from dependence on the US dollar.

According to a Bloomberg report, the link between the currencies will begin Tuesday. The move by the China Foreign Exchange Trade System makes the Swiss franc the seventh major currency that can bypass conversion into the US dollar and be directly exchanged for yuan.

The People’s Bank of China said it welcomed the move in a statement on its website:

This is an important step in strengthening bilateral economic and trade connections between China and Switzerland. And China and Switzerland will make further efforts to mutually promote the direct trading between the two currencies based on market principle. Development of direct trading between RMB and CHF will contribute to the formation of direct exchange rate between the two currencies. This will help lower currency conversion cost for economic entities, facilitate the use of RMB and CHF in bilateral trade and investment, promote the financial cooperation and enhance economic and financial ties between the two countries.”

The announcement comes as China presses the yuan’s case for reserve-currency status at the International Monetary Fund.

As we reported late last month, three people briefed on IMF discussions said a draft report by agency staff reached a favorable conclusion on including the Chinese currency in the Special Drawing Rights basket. One officer said the path forward appears clear.

Interestingly, a large amount of gold is being recast and imported into China from Switzerland. The Wall Street Journal reported a major surge in exports from Switzerland in September.

Exports of gold by key supplier Switzerland to Hong Kong rose to 59.8 tons in September, 65% higher than in August and the highest monthly volume in 1½ years, according to a Commerzbank report.”