Cross-Border Yuan Gains Ground as Beijing Strengthens the Renminbi's Role in International Finance
Cross-Border Yuan Use Surges
The People's Bank of China (PBOC) has reported a remarkable 21.1% rise in cross-border yuan payments and receipts during the first eight months of the year. This surge has reinforced China's pursuit to increase the renminbi’s role in global trade.
Global Trade Dynamics
According to the PBOC, total cross-border yuan payments and receipts reached 41.6 trillion yuan (approximately US$5.9 trillion). This accounted for 26.5% of total settlements including foreign currencies. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) confirmed that the yuan maintained a steady share of 4.69% in global transactions.
International Financial Centres
- Hong Kong and mainland China together represented 53% of total cross-border transactions.
- Singapore contributed 9.8% and the UK 5.9%.
Central Bank Strategy and Global Influence
The PBOC is set to bolster the fundamental systemic arrangement for the yuan's use across borders. Highlights from the report also emphasized ongoing efforts to elevate Shanghai, Beijing, and Shenzhen as integral international financial centres, with a focus on enhancing offshore yuan markets.
- 31 bilateral currency swap agreements have been signed under the Belt and Road Initiative.
- 19 countries have established yuan settlement arrangements.
Despite its rising popularity, the European Central Bank notes that the yuan's full potential as an international reserve currency hinges on the opening of China’s capital account for easier market transactions.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.