Chinanews client, Beijing, August 15th (Reporter Li Jinlei) RMB is becoming more and more international!

　　The fifth largest international payment currency, the fifth largest international reserve currency, the third largest trade financing currency, and the eighth largest foreign exchange transaction currency...... This is the RMB!

From the central bank official account.

The fifth largest international payment currency

　　On August 14, the Central Bank issued the "Renminbi Internationalization Report 2020", and the RMB internationalization will reach a new level in 2019. According to the latest statistics, the renminbi ranks fifth among major international payment currencies, with a market share of 1.76%.

　　The report shows that in 2019, the cross-border use of renminbi has grown rapidly against the trend. The total amount of cross-border receipts and payments of renminbi on behalf of banks throughout the year was 19.67 trillion yuan, a year-on-year increase of 24.1%. The rapid growth in 2018 continued to maintain rapid growth. The amount paid hit a record high.

The fifth largest international reserve currency

　　According to the IMF (International Monetary Fund) official foreign exchange reserve currency composition (COFER) data, as of the end of the fourth quarter of 2019, the scale of RMB reserves reached 217.67 billion US dollars, accounting for 1.95% of the total foreign exchange reserves of the designated currency, ranking higher than the Canadian dollar Of 1.88%, ranking fifth, which is the highest level since the IMF began to announce RMB reserve assets in 2016.

　　According to incomplete statistics, more than 70 central banks or monetary authorities around the world have included the renminbi in foreign exchange reserves.

　　In the first quarter of 2020, the share of RMB foreign exchange reserves announced by the IMF further rose to 2.02%, the highest level since RMB joined the SDR (Special Drawing Rights) currency basket in 2016.

Currency profile map.

The third largest trade finance currency

　　The appeal of RMB as an international financing currency is gradually emerging.

　　The report pointed out that the survey showed that about 82% of surveyed overseas industrial and commercial enterprises said that when the liquidity of international currencies such as the U.S. dollar and the euro is tight, they will consider using the renminbi as a financing currency, which is a record high since 2016. 75% of surveyed overseas industrial and commercial enterprises are willing to consider using RMB as a trade financing currency in their economic and trade transactions with China.

The eighth largest foreign exchange currency

　　In 2019, global RMB and foreign exchange transactions have steadily increased. According to the latest data released by BIS in April 2019 (once every three years), the renminbi ranks eighth among the most actively traded currencies in the world and the first among emerging market currencies.

　　The global average daily trading volume of RMB increased from USD 204 billion in 2016 to USD 284 billion in 2016, and its share of the global foreign exchange market increased from 4% in 2016 to 4.3%.

Data map: Bank cash counter at work. Photo by Ai Qinglong

RMB assets are getting more and more popular

　　The report pointed out that as of the end of 2019, the total amount of financial assets such as domestic RMB stocks, bonds, loans and deposits held by foreign entities totaled 6.41 trillion yuan, a year-on-year increase of 30.3%. Among them, the market value of stocks is 2.1 trillion yuan, the bond custody balance is 2.26 trillion yuan, the deposit balance is 1.21 trillion yuan (including interbank current account deposits), and the loan balance is 833.2 billion yuan.

　　Domestic financial market stocks and bonds have become the main types of RMB assets allocated by overseas entities. As of the end of 2019, the scale of domestic RMB stocks and bonds held by foreign entities increased by 48.6% year-on-year. Among them, bond custody accounted for 2.3% of the total bond custody in the interbank bond market, and the market value of holdings accounted for 3.6 of the total market value of A shares %. In 2019, stocks accounted for 66.6% of the newly added domestic RMB assets by overseas entities.

　　In other words, more and more foreign capital is going to China's capital market to pan for gold. In 2019, cross-border receipts and payments of securities investment in RMB totaled 9.51 trillion yuan, a year-on-year increase of 49.1%, and a net inflow of 621.9 billion yuan.

More foreign trade companies use RMB for cross-border receipts and payments

　　According to the survey questionnaire of the People's Bank of Foreign Trade Enterprises, since 2019, foreign trade enterprises have been more active in participating in cross-border RMB business. As of the fourth quarter of 2019, 84.6% of enterprises have chosen RMB as the main currency for cross-border settlement.

　　From the perspective of the driving factors for enterprises to choose cross-border RMB settlement, since 2019, due to the influence of external factors such as Sino-US trade frictions, the fluctuation of the RMB exchange rate has increased. Many companies choose cross-border RMB business as a means for companies to avoid exchange rate risks, accounting for 64.7%. In addition, simple settlement processes, lower settlement costs, and convenient corporate financial accounting and capital management are also the main reasons why companies choose to conduct cross-border RMB business, accounting for 43.2%, 36.8% and 32% respectively.

　　The RMB cross-border payment system (CIPS) has become the main channel for RMB cross-border settlement. In 2019, the CIPS system processed a total of 1.884 million cross-border RMB transactions with a value of 33.9 trillion yuan, an increase of 31% and 28% year-on-year respectively; the average daily processing business was 7,537 transactions with a value of 135.7 billion yuan.

RMB data map. Photo by China News Agency reporter Zhang Hao

Iron ore transactions are settled in RMB

　　In recent years, my country has been the world's largest iron ore trade importer and consumer country. Iron ore imports and consumption are at 70% and 50% of the global level, but it has been relatively passive in terms of pricing.

　　Nowadays, domestic iron and steel companies have made continuous progress in using RMB to settle iron ore imports. In early May 2020, Baosteel Co., Ltd., a subsidiary of China Baowu Group, and Australia's Rio Tinto Group completed the first RMB cross-border settlement using blockchain technology. This is another new development of Baosteel after its first RMB cross-border settlement with Brazil's Vale and Australia's BHP Billiton in January and April this year.

　　So far, China Baowu and the world's three major iron ore suppliers have achieved RMB cross-border settlement, with a total amount of more than 500 million yuan.

RMB exchange rate remains basically stable

　　At the beginning of August 2019, affected by the further escalation of trade frictions, the RMB exchange rate “breaks 7” driven by market forces, but the exchange rate is expected to remain stable overall. Since then, affected by changes in the international economic and financial situation and the situation of trade frictions, the RMB exchange rate has repeatedly broken 7 .

　　The report pointed out that in general, cross-border capital flows and foreign exchange supply and demand will be basically balanced in 2019, the exchange rate is expected to be generally stable, and the RMB exchange rate will remain basically stable at a reasonable and balanced level.

　　Overall, in 2019, the domestic RMB exchange rate will fluctuate in both directions, and the flexibility will increase significantly. The RMB against the US dollar and other major global currencies rose and fell. The central parity of RMB against the US dollar, Japanese yen and British pound depreciated by 1.62%, 3.43% and 5.18% respectively from the end of 2018. The central parity of RMB against the euro rose by 0.41% from the end of 2018.

Renminbi and US dollars. Photo by Chinanews reporter Li Jinlei

Improve the free use of RMB

　　According to the report, the internationalization of RMB is a natural process driven by the market. In recent years, the cross-border use of the renminbi has maintained rapid growth, especially since the new crown epidemic has impacted global trade, finance and economy this year, the cross-border use of the renminbi has remained resilient and has shown growth.

　　The People's Bank of China stated that in the future, it will continue to be guided by serving the real economy, adhere to the principle of marketization, and steadily promote the internationalization of the RMB.

　　One is to insist on market-driven. Explore and promote a higher level of trade and investment facilitation, continue to remove obstacles to restrict the use of RMB at home and abroad, and create a level playing field for RMB and other major convertible currencies. The second is to continue to promote the opening of the domestic financial market and the interconnection of infrastructure. Further facilitate foreign investors to use RMB to invest in domestic bonds and stocks. The third is to guide the healthy development of the offshore RMB market. Raise the level of free use of the renminbi, and promote healthy interaction and deep integration between offshore and onshore markets. The fourth is to improve macro-prudential management. Strengthen the monitoring, analysis and early warning of cross-border capital flows, make counter-cyclical adjustments, and prevent risks in cross-border capital flows. (Finish)