New rules hope to bring more cross-border RMB transactions
Internationalization of yuan gains momentum
China’s central bank announced new measures on Friday to encourage cross-border yuan transactions, as the internationalization of the currency picks up steam.
The rules aim to “improve policies for cross-border RMB services, create an excellent business environment, and service One Belt, One Road construction,” a statement on the People’s Bank of China website said.
Moves to encourage use of yuan include allowing foreign investors to freely remit yuan-denominated profits, while Chinese firms will be allowed to transfer funds raised overseas back to China.
After years of Beijing promoting the internationalization of the yuan, recent developments show signs it is finally gaining traction.
In December, Pakistan said that the US dollar may soon be replaced by yuan in cross-border trade between the two countries, after the launch of the Long Term Plan for the China-Pakistan Economic Corridor.
Earlier this week, European Central Bank Executive Board member Benoit Coeure disclosed in an interview that the bank had sold dollars over the summer to add the Chinese yuan to its foreign reserves. The move, he said, is an “acknowledgement of the growing international role of the renminbi,” adding that there will be further steps in the future.