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China’s yuan continues to grow as an international currency, central bank says
- ‘We expect more market participants will accept yuan as settlement and payment currency,’ People’s Bank of China says in annual report
- Value of cross-border yuan payments and receipts rose 24.1 per cent in 2019 to 19.67 trillion yuan, it says
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China’s central bank said it expects more countries to accept the yuan for cross-border payments and settlements amid growing concerns about the country’s high exposure to the US dollar.
In its annual report on the internationalisation of the yuan, which was released on Friday, the People’s Bank of China estimated “rapid and robust growth” this year despite the impact of the coronavirus pandemic. Such expansion would help to consolidate the growth momentum seen since the yuan was added to the International Monetary Fund’s currency basket in 2015.
“We expect more market participants will accept yuan as settlement and payment currency,” it said.
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China is heavily exposed to the US-led Clearing House Interbank Payment System (CHIPS) and the Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT), which means it is vulnerable to US sanctions, such as those imposed on Iran and Russia.
A total of 11 officials from mainland China and Hong Kong were put on a US sanctions list last week, as the rivalry between the world’s two largest economies continues to escalate.
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China’s state-owned banks with overseas operations could be the next targets if they are found to have business links to the sanctioned officials.
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