SEOUL, Dec. 1 -- A market to directly trade currencies of South Korea and China, rather than brokering the two currencies with the U.S. dollar, was opened here in Seoul Monday, taking a first step toward the Chinese yuan's internationalization efforts in Northeast Asia.

To exchange the won and the yuan, one currency should have been swapped into the U.S. dollar first to gain the other currency that is changed with the dollar later. Such brokering doubled currency transaction costs between the two countries, whose annual trade has grown about 50 times since they set up diplomatic ties in 1992.

During the July summit meeting in Seoul between Chinese President Xi Jinping and his South Korean counterpart Park Geun- hye, the two leaders agreed to launch the won-yuan direct trading market by the end of December to resolve inconveniences and deepen economic ties between the two neighbors.

"The won-yuan market is a venture growth company having a great potential. The company will be fostered here into a world-class business with competitiveness," Finance Minister Choi Kyung-hwan said in an opening ceremony.

"If the won-yuan market matures, transaction costs for the two currencies will fall and the bilateral trade will rise, contributing to economic growth for both countries," Bank of Korea Governor Lee Ju-yeol said at the launching event.

Lee noted that the matured won-yuan market would offer South Korea an opportunity to develop into an offshore yuan hub.

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