Home Business Central Bank: Steady and prudent promotion of RMB internationalization to promote a virtuous circle of RMB onshore and offshore markets

Central Bank: Steady and prudent promotion of RMB internationalization to promote a virtuous circle of RMB onshore and offshore markets

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Central Bank: Steady and prudent promotion of RMB internationalization to promote a virtuous circle of RMB onshore and offshore markets

On September 23, the People’s Bank of China released the 2022 RMB Internationalization Report, stating that since 2021, the People’s Bank of China has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council. Fully implement the new development concept, adhere to reform and opening up and mutual benefit and win-win results, and proceed with the internationalization of the RMB prudently based on the independent choice of market-driven enterprises, so as to provide strong support for the stable operation of the real economy. All indicators of RMB internationalization are generally improving, the function of RMB as a payment currency has been steadily improved, the function of investment and financing currency has been further deepened, the function of reserve currency has been continuously improved, and the function of denominated currency has been gradually enhanced.

Since 2021, the amount of RMB cross-border receipts and payments has continued to grow on the basis of the high base of the previous year. In 2021, the total amount of RMB cross-border receipts and payments by banks on behalf of customers will reach 36.6 trillion yuan, a year-on-year increase of 29.0%, and the amount of receipts and payments will reach a record high. RMB cross-border receipts and payments were generally balanced, with a cumulative net inflow of 404.47 billion yuan throughout the year. According to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the share of RMB in international payments will increase to 2.7% in December 2021, surpassing the Japanese yen to become the fourth payment currency in the world, and will further increase to 3.2% in January 2022, a record high. According to the Currency Composition of Official Foreign Exchange Reserves (COFER) data released by the International Monetary Fund (IMF), in the first quarter of 2022, the RMB accounted for 2.88% of the global foreign exchange reserves, which is higher than that when the RMB joined the Special Drawing Rights (SDR) in 2016. ) rose 1.8 percentage points in the currency basket, ranking fifth among the major reserve currencies. In May 2022, the International Monetary Fund (IMF) raised the weight of the renminbi in the special drawing rights (SDR) from 10.92% to 12.28%, reflecting the recognition of the increased degree of free use of the renminbi.

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The volume of cross-border RMB settlements related to the real economy maintained rapid growth, and areas such as bulk commodities and cross-border e-commerce became new growth points, and cross-border two-way investment activities continued to be active. The RMB exchange rate has generally shown a two-way fluctuation trend, and the endogenous demand of market players to use RMB to avoid exchange rate risks has gradually increased. Fundamental systems such as RMB cross-border investment and financing, transaction settlement, etc. have been continuously improved, and the ability to serve the real economy has been continuously enhanced.

my country’s financial market continues to open up, RMB assets remain highly attractive to global investors, and cross-border RMB receipts and payments under securities investment generally show a net inflow. As of the end of 2021, the total amount of financial assets such as domestic RMB stocks, bonds, loans and deposits held by foreign entities totaled 10.83 trillion yuan, a year-on-year increase of 20.5%. The offshore RMB market has gradually recovered and transactions have become more active. By the end of 2021, RMB deposits in major offshore markets were close to 1.50 trillion yuan.

In the next stage, the People’s Bank of China will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely implement the decisions and arrangements of the CPC Central Committee and the State Council, coordinate development and security, and proceed steadily and prudently on the basis of market-driven and independent choice by enterprises. RMB internationalization. Further consolidate the basic institutional arrangements for the cross-border use of RMB, meet the needs of the real sector for the use of RMB, promote the two-way opening of the financial market at a higher level, and promote a virtuous circle of RMB onshore and offshore markets. At the same time, we will continue to improve the macro-prudential management framework for cross-border capital flows that integrates domestic and foreign currencies, establish and improve the monitoring, assessment and early warning system for cross-border capital flows, and firmly maintain the bottom line of no systemic risks.

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