China will create more schemes offering Renminbi (RMB) convertibility in free trade zones in 2016, an official with the State Administration of Foreign Exchange (SAFE) has said.
Guo Song said authorities will make the moves, designed to open up the capital market, "within a prescribed limit," but did not give any further details.
Guo's remarks came after the Chinese central bank's historic approval of RMB convertibility on the capital account with a limit of 10 million U.S. dollars for the Tianjin, Guangdong and Fujian FTZs on Dec. 11, 2015.
China allowed RMB convertibility on the trade accounts nearly two decades ago, but almost all capital account transactions in the mainland remain under varying degrees of control.
But the control has been loosened. Going by International Monetary Fund (IMF) classifications, 37 of 40 capital account items are already fully or partly convertible in China, leaving only three inconvertible, Guo said.
The RMB was admitted by the IMF into its SDR basket alongside the dollar, euro, pound sterling and yen on Nov. 30 last year.
To gradually open the capital account, the government introduced the Qualified Foreign Institutional Investors, known as QFII, and RMB-denominated Qualified Foreign Institutional Investors programs in 2003 and 2011 respectively.
