Inclusion in SDR basket 'a milestone'
The yuan's global march has accelerated, with the currency's international standing continuing to rise amid further acceptance, the People's Bank of China (PBOC) said on Wednesday.
Cross-border receipts and payments in yuan surged 21.7 percent year-on-year to 12.1 trillion yuan ($1.8 trillion) in 2015, accounting for 28.7 percent of China's global transactions, according to a statement posted on the PBOC's website on Wednesday.
As of December 2015, the yuan was the third-largest financing and trading currency, as well as the fifth-largest payment and foreign trading currency in the global market, the statement noted, citing statistics from the Society for Worldwide Interbank Financial Telecommunication.
Experts said one reason for the yuan's integration into the global market is the Chinese government's efforts to build up a solid financial infrastructure base for its internationalization.
"The Chinese financial regulators have opened up the exchange rate market in recent years, which led to the inflow of foreign investment," Liu Jian, a senior analyst at Bank of Communications, told the Global Times on Wednesday.
One of the most important reforms took place on August 11, 2015, which changed the way the daily fixing rate of yuan against dollar is calculated, with the aim of meeting the IMF's criteria for a Special Drawing Rights (SDR) review.
The inclusion of the yuan into the SDR basket in November 2015 was a milestone, said the report.
The reforms have already yielded positive results, media reports noted.
According to a Xinhua report on Wednesday, it is estimated that based on current trends, China's currency is likely to become a harbor for global capital to ward off potential risks as long as the market remains stable and reform further deepens.
The launch of the yuan's Cross-border Interbank Payment System in October 2015 and the establishment of new offshore clearing centers, including those located in London, Seoul and Toronto, have simplified cross-border yuan inflows, according to Li Xuanjing, an associate research fellow at the Institute for International Monetary Affairs of Renmin University of China.
"Meanwhile, as new cooperation opportunities surged along the 'One Belt, One Road' initiative and domestic enterprises increasingly eyed the global market, opportunities to use the yuan as a transaction currency rose," Li told the Global Times on Wednesday.
Experts also warned that the slowdown of China's economy and the recent depreciation of the yuan may add uncertainties over the prospects of yuan internalization.
"These are only passing fluctuations, and the yuan's internationalization is a long-term process," Liu noted.
The yuan's use as a reserve currency will keep expanding, and channels for the yuan's cross-border financing will further open up, said the PBOC.
