Experts wary of roll-out for liberalisation

Market watchers remain sceptical about whether Beijing's targeted time frame for opening its capital accounts, a key step in the yuan's journey to global acceptance, is too soon.

After making its currency fully convertible for trade settlement under the current account, China's key task in globalising the yuan is to promote free capital movements under the capital account.

The central bank is looking to achieve a "basic" opening of the capital account by 2015 and attain full liberalisation by 2020.

However, critics said, no clear timetable has been announced to achieve what a fully open capital account requires - flexible interest and exchange rates.

"With inflexible interest and exchange rates, capital account liberalisation will render monetary policy ineffective and create large welfare losses for China," said Yu Yongding, a former member of the central bank's monetary policy committee.

The yuan's internationalisation can be achieved only when "the exchange rate can adjust constantly around its equilibrium level and domestic interest rates are flexible enough in response to the fluctuations of cross-border capital flows", Yu said.