New | China's international payment system for yuan could launch next month

China's much anticipated international payment system could be launched as early as next month, undeterred by market turbulence caused by last month's surprise pricing change, three sources said.

The China International Payment System (CIPS), essential infrastructure for encouraging global use of the yuan, will connect the sprawl of offshore clearing centres and smooth out the current bumps in remitting funds between onshore and offshore.

The People's Bank of China is in the last stage of testing the system and the official launch could happen within a month at the soonest, one source said.

"The central bank is going through the final review of readiness," he said.

In a bid to soothe market concerns following the near 2 per cent devaluation of the yuan against the US dollar last month, Premier Li Keqiang said at the World Economic Forum in Dalian last week that CIPS would be ready by the end of the year.

Viewed as a worldwide payment superhighway, the initial phase of CIPS will enable extended cross-border yuan payments beyond China's normal office hours, and also eliminate language barriers.

Cross-border payments now need to go through PBOC-approved Chinese banks, which connect with the China National Advanced Payment System, the domestic funds transfer system that supports messages in Chinese only. However, as international payments use the English-language Swift messaging system, manual translation can be involved and adds to costs.