An evolutionary time line of China’s yuan

China’s currency has made tremendous strikes over the past two decades towards acceptance as a major international reserve currency

PUBLISHED : Tuesday, 01 December, 2015, 12:02pm
UPDATED : Monday, 27 June, 2016, 11:51am

2003 November: State Council gave green light for banks in Hong Kong to provide yuan-deposit, remittance, exchange and credit card services. Hong Kong residents can exchange up to 20,000 yuan per day and remit 80,000 yuan per day.

2005 July: Beijing abolishes the yuan-US dollar and in its place introduces a managed float system set around a daily mid-point price announced by People’s Bank of China. Initially, the currency was allowed to fluctuate 0.3 per cent of the midpoint on any single day, but the daily band has since been widened to a 2 per cent.

2009 June: RMB internationalisation process begin. The HKMA and PBOC signed an agreement to allow trade between Hong Kong and the mainland to be settled in yuan from in five cities.

2010 June: Cross border yuan trade settlement scheme expanded to 20 provinces and cities.

2010 July: Beijing allows yuan transfers among financial firms and individuals to facilitate the developement of funds, insurance and other investment products denominated in yuan. First yuan corporate bond issued in Hong Kong by Hopewell Highway Infrastructure to raise 1 billion yuan.

2010 August: PBOC allows yuan clearing banks and other overseas eligible financial institutions to trade directly in mainland interbank market.

2011 January: PBOC announces pilot scheme for mainland companies to settle overseas direct investments in yuan.

2011 April: First first yuan IPO in Hong Kong with the listing of Hui Xian Real Estate Investment Trust, a spin-off of Li Ka-shing’s Beijing Oriental Plaza.

2011 August: Beijing allow overseas firms to use yuan to settle foreign direct investment in China, instead of the US dollar.

2011 December: Launch of renminbi qualified foreign institutional investor scheme (RQFII).

2012 January: Hong Kong signed agreement with City of London to enable its development as the next offshore yuan trading centre.

2012 June: China green lights direct trading of the yuan and the Japanese yen in Tokyo and Shanghai. The National Development and Reform Commission identifies Qianhai as a testing ground for freer convertibility of the yuan.

2012 October: SFC approved the first dual-currency exchange-traded fund. Hopewell Highway Infrastructure also announced the first yuan-denominated share placement in the city.

2013 January: PBOC appointed Bank of China’s Taipei branch as yuan clearing bank for Taiwan. First cross-border yuan loans authorised with 15 banks in Hong Kong permitted to offer a combined 2 billion yuan in loans to companies in Qianhai.

2013 February: Beijing has named Industrial and Commercial Bank of China (ICBC) as clearing bank for offshore yuan business in Singapore.

2013 April: Australia started direct trading between the yuan and the Australian dollar.

2013 June: PBOC and Bank of England agreed to a three-year currency swap line of up to 200 billion yuan. Hong Kong launches the world’s first offshore yuan interbank rate fixing.

2013 September: Shanghai designated a free-trade zone to have freer convertibility of yuan

2014 November: Removal of the daily exchange cap at 20,000 yuan a day ahead of the launch of the stock connect scheme to tie up stock markets between Hong Kong and Shanghai to allow retail investors to conduct cross border trading in yuan up to 550 billion yuan.

2015 July: Launch of the mutual fund recognition scheme up to a total of 600 billion yuan.

2015 August: PBOC unveils one-off devaluation of the yuan by 2 per cent as well as changes to the mid-point price setting mechanism.

2015 October: PBOC launches the first phase of China International Payment System and allow certain foreign banks to trade in mainland bond market.

2015 November: State Council pledges to make the onshore yuan freely tradeable by 2020.

2015 December: IMF includes the yuan into its Special Drawing Rights currency reserve, joining the US dollar, euro, British pound and Japanese yen.