China can boost yuan’s international role, says report
- Despite the increasing use of the currency globally, concerns about its convertibility and the country’s exchange controls linger
- The yuan is far behind the US dollar and euro in a rating of the currency’s ‘internationalisation’ by Renmin University
China has the opportunity to boost the yuan’s international role compared with currencies such as the US dollar and euro, according to a new report.
A report from Renmin University measuring the currency’s “internationalisation” – based on its use in international trading, foreign exchange reserves and transactions – found that the yuan had a score of just 6.4 out of 100 last year.
Although this was the yuan’s highest to date, it was well behind the dollar and euro which stood at 50.5 and 25.16, respectively.
We should also strengthen exchanges with developed countries in low-carbon economic transformation and green financial development
In June the yuan also ranked fifth in Swift’s global payment list with a 2.77 per cent share – well behind the US dollar on 42 per cent or the euro on 21.25 per cent.
Released on Saturday, the Renmin University report said China should push for more free-trade agreements, either bilateral or regional ones, to boost trade and investment opportunities and create favourable conditions for the yuan’s overseas use.
“We should also strengthen exchanges with developed countries in low-carbon economic transformation and green financial development, and tap the potential of the yuan to serve global climate cooperation and low-carbon development,” it said.
It also suggested: “China should actively participate in the formulation of future digital trade rules and global digital economic governance, and give full play to our advantages in digital transformation and central bank digital currency development.”