China’s central bank has signalled a clear shift toward a more aggressive push to internationalise the yuan, dropping the cautious rhetoric that has long surrounded the campaign.
Report comes via Bloomberg (gated)
Following a key Communist Party policy meeting, the People’s Bank of China said it will expand the yuan’s global role by increasing its use in trade, deepening two-way financial market openness, and strengthening the offshore yuan market.
The change in language—omitting the usual references to advancing the currency’s use “prudently and steadily”—suggests Beijing is now more confident about promoting the yuan as a global currency.
Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered:
- new tone reflects “a growing determination by PBOC officials to elevate the yuan’s status and reduce dependence on the dollar,
- especially as global investors look for alternative safe assets
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The yuan’s renewed globalisation push could lift demand for Chinese assets and reduce dollar exposure in regional trade, potentially boosting Asian FX correlations and cross-border capital flows.
This article was written by Eamonn Sheridan at investinglive.com.