China Central Bank pushes for cross-border RMB use

The RMB is the currency of choice for the BRICS New Development Bank. It is the fifth most used currency in the world

The People’s Bank of China on Friday said that it encouraged cross-border and overseas use of the renminbi (RMB) currency to settle accounts and boost investment.

It acknowledged that Chinese banks have been looking to trade in offshore RMB and that there was a growing need for foreign-funded companies in China to be able to transfer investment revenue overseas.

“Enterprises may use RMB for cross-border settlement in whatever foreign currency-based trade,” the PBOC said.

The central bank’s announcement comes part and parcel of the Beijing government’s efforts to increase foreign investment in China and facilitate ease of doing business there for domestic and foreign enterprises.

This would also work to support the extensive and increasing Chinese investments abroad.

This has led to the most prominent Chinese banks to expand their business and trade in major world currencies abroad.

Meanwhile, international payments infrastructure company SWIFT reported that the RMB surpassed the Swiss franc and the Canadian dollar as the sixth most used currency in November last year.

The Chinese currency renminbi (RMB, also known as the yuan) “has ascended to the world’s fifth most widely used payment currency,” an HSBC survey in 2016 showed.

The survey, Renminbi Internationalisation Study 2016, found that corporations are more than ever introducing the RMB into their treasury and “integrating it across various business applications each year”.

China’s currency has been gaining popularity and traction in the past few years.

This article (China Central Bank pushes for cross-border RMB use) was originally published on BRICS Post and syndicated by The Event Chronicle

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