China has ‘rare opportunity’ to accelerate yuan internationalisation, but ‘scope limited’

China has long been keen to promote the yuan’s overseas, as well as reducing its reliance on the US dollar

It has become a regional reserve currency for Russia, while Brazil and Bangladesh accept trade settlements and investments in yuan

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The yuan has now become a regional reserve currency for Russia as it seeks to cut reliance on the US dollar. Photo: EPA-EFE

Published: 12:00am, 13 May 2023Updated: 2:34am, 13 May 2023

After years of promoting international use of the yuan, China is now in a position to grow its influence in global transactions, analysts said, amid a rising number of countries willing to use the Chinese currency for payments.

Since Russia’s invasion of Ukraine last year, the United States and its allies have blocked Russia’s central bank access to its foreign reserves, as well as banning several Russian banks from the Swift international payments network.

Greater international use of the yuan will provide channels for busting US-led sanctions, analysts added.

The yuan has now become a regional reserve currency for Russia as it seeks to cut reliance on the US dollar.

The issue of whether the payment system will be used as part of that conflict is something that is justifiable been studied by all of those who might be involved

Carl Tannenbaum

Brazil and Bangladesh are among the countries that have since accepted trade settlements and investments in yuan, while Thailand’s central bank has said it will relax rules on the use of the yuan for trade this year.

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