Included in the first batch of licencees are Australia-based Westpac and ANZ and Hong Kong-based HSBC, according to separate statements by the firms. The licence follows an agreement between the New Zealand and Chinese governments to allow banks to directly trade the two currencies. Both countries entered into a free trade agreement in October 2008, making New Zealand the first developed country to conclude an FTA with China. 

"China is now New Zealand's largest trading partner and a key market for many of our major industries. It's also a major source of migrants, students and tourists, so Chinese culture makes up an important part of the fabric of our community and enhances business connectivity with Asia," said David Green, managing director institutional at ANZ New Zealand.

According to Westpac, the NZ dollar becomes the fourth currency to be fully convertible against the RMB. It follows similar moves in 2013 when China granted direct convertibility of the Australian dollar to join to the US and Japan which already had this capacity. 

"RMB/NZD convertibility marks another milestone in the internationalisation of the RMB. It further demonstrates the country's determination to speed its financial market reform," commented Helen Wong, deputy chairman, president and chief executive of HSBC Bank (China).