BEIJING, Dec. 6 (Xinhua) -- The Chinese government plans to launch an option market for its currency, the Renminbi (RMB), to help its banks avoid risks incurred by the partial flotation of exchange rates.

The Beijing News quoted an insider who refused to be named as saying the State Administration of Foreign Exchange (SAFE) was preparing for the launch following surges in the yuan's value.

Options on the right to sell and purchase Renminbi at a preset price in a certain period would help prevent losses caused by changing exchange rates.

The insider said it was difficult to predict the specific date of the launch as the plan had not been finally approved by the central bank.

The final implementation should take market factors into consideration as well as approval from the central bank.

The SAFE press office said they are not aware of the development.

Zheng Xiang, chief trade operator with the Minsheng Banking Corporation, said an option market would help banks and foreign trade companies avoid risks.

The value of the yuan hit a new high Monday, with a central parity rate of 7.824 yuan to one dollar, breaking the 7.83 mark. The yuan has gained 3.65 percent since China reformed the exchange rate system last year.

Barclays PLC Bank predicted the daily fluctuation set at 0.3 percent upward or downward was expected to expand to 1.5 percent, which would impose higher risks for banks and companies.

Experts believe an option market for RMB would also give the domestic market greater say in the yuan's value.