Businesses favour increasing use of RMB amid trade tensions and pandemic
The use of RMB in international transactions will increase despite US-China trade frictions and on-going COVID-19 pandemic according to the latest annual survey on RMB internationalisation conducted jointly by China Construction Bank and Asian Banker Research.
Prevailing trade tensions and currency volatility identified as major challenges to RMB internationalisation
Use of RMB in cross-border investment and trade settlements is growing
Liberalisation of China’s financial markets, trade facilitation arrangements and PBOC digital currency will increase RMB usage
Despite headwinds from the ongoing trade tensions and unprecedented disruption caused by the COVID-19 pandemic, businesses globally are still increasing their use of renminbi (RMB) in international transactions.
Supporting the continued internationalisation of the RMB are the initiatives to liberalise China’s financial market, Beijing’s trade facilitation arrangements with key partners and the People’s Bank of China’s (PBOC) launch of digital currency.
These are the key highlights of the RMB Internationalisation Report 2020 published by China Construction Bank in partnership with The Asian Banker based on a corporate survey that evaluates the progress in the internationalisation of the currency and developments in cross-border RMB-denominated products and businesses. The survey involved 643 executives from three groups of institutions, comprising companies and enterprises based in China (Chinese companies),companies and enterprises based outside of China (overseas companies) and financial institutions (FIs) around the globe.
Although concerns over trade frictions and COVID-19 pandemic remain, respondents surveyed were generally optimistic about the internationalisation of the RMB in 2020.
New regulations and frameworks introduced by various Chinese agencies in 2019 provided greater impetus to RMB internationalisation. The introduction of new Free Trade Zones, expansion of the Belt and Road Initiative and inclusion of China “A” shares in the MSCI index are among key elements contributing to...
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