In December 2021, the proportion of international payments will rise to fourth -
The global status of the renminbi has steadily improved
Our reporter Yao Jin
The global status of the RMB has reached a new level.
According to a recent report released by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the share of RMB international payments in December 2021 increased from 2.14% in November to 2.70%, and that month, the share of RMB in international payments rose to fourth.
This is also the first time that the global ranking of RMB international payments has surpassed the Japanese yen since the “exchange reform” of the People’s Bank of China in August 2015.
Experts and scholars said that the strong performance of RMB and RMB assets is inseparable from the high-quality development of China's economy.
In the future, the internationalization of the renminbi will promote the renminbi to play a more important role in the international arena.
Payment "figures" are becoming more and more active
According to the SWIFT report, in December 2021, in the ranking of payment amounts in major currencies, the US dollar, the euro, and the pound rank among the top three with 40.51%, 36.65%, and 5.89%, respectively.
The yen's share fell to 2.58%, slipping one spot from the previous fourth place to the fifth most active currency in the world.
In terms of proportion, the proportion of RMB global payments rose from 2.14% in November last year to 2.70% in December; in terms of amount, the amount of RMB payments increased by 34.6% compared with November, and the total amount of global payments in all currencies increased during the same period. 6.44%.
Zhou Maohua, a macro researcher at the Financial Market Department of China Everbright Bank, believes that the proportion of RMB in global payments has further increased, which is basically consistent with my country's high foreign trade boom and the continuous inflow of foreign capital attracted by RMB assets.
"The domestic epidemic prevention situation is improving, the economy is operating in a reasonable range as a whole, the internationalization of the RMB is steadily advancing, the RMB exchange rate is running smoothly on the whole, and the willingness of overseas trade parties to use the RMB as a settlement and payment tool continues to increase." Zhou Maohua said.
The latest "Currency Composition of Official Foreign Exchange Reserves (COFER)" data released by the International Monetary Fund shows that in the third quarter of 2021, the proportion of RMB in global foreign exchange reserves rose again, continuing the record since the data was reported in the fourth quarter of 2016. new highs.
The scale of RMB reserves is also rising.
Data show that in the third quarter of 2021, the total RMB foreign exchange reserves rose to US$318.99 billion, achieving 11 consecutive quarters of growth.
"In recent years, the proportion of RMB in global foreign exchange reserve assets has steadily increased, reflecting the increasing preference of global central banks for RMB assets." Zhou Maohua said that in the future, the RMB exchange rate is expected to remain basically stable, and the safety and hedging attributes of RMB assets It will be further strengthened, and the proportion of RMB in global foreign exchange reserves still has much room for improvement.
Support for high-quality development
The strong performance of RMB and RMB assets is inseparable from the high-quality development of China's economy.
Wang Chunying, deputy director of the State Administration of Foreign Exchange and spokesperson, recently stated that in 2021, foreign investors will increase their holdings of domestic bonds to US$166.6 billion, and RMB assets have become an important asset for foreign investment.
Real economic activities such as trade and investment have become the main driving force for cross-border capital inflows.
According to data from the Ministry of Commerce, my country's actual utilization of foreign capital in 2021 will reach 173.5 billion US dollars, a year-on-year increase of 20%, which is at a historical high, which reflects the attractiveness of China's good economic development prospects to overseas long-term capital.
"The increase in the share of RMB in international payments is related to the increase in the share of my country's import and export trade in the world." Wang Youxin, a senior researcher at the Bank of China Research Institute, believes that under the bottleneck of the global supply chain, overseas import and export trade and logistics circulation are not smooth, and orders are pouring in. In my country, driven by the growth of my country's import and export trade scale, the share of RMB settlement in international trade has increased.
In addition, in the context of the rebound of the US dollar, the RMB exchange rate remained relatively stable, which enhanced the confidence of international investors in using RMB in cross-border trade, investment and financing.
Wang Chunying summed up several characteristics for foreign capital to increase RMB asset allocation: First, the growth rate is fast. Since the opening of the capital market in 2017, from 2018 to 2021, foreign capital has accumulated a net increase in domestic bonds and stocks by more than US$700 billion, with an average annual average of over US$700 billion. The growth rate is 34%; second, there is great potential for improvement. At present, the proportion of foreign capital in my country's stock and bond markets remains at a level of 3% to 5%, compared with developed and emerging economies such as Japan, South Korea, and Brazil. Third, the investment value is high, and the correlation between RMB assets and asset prices and returns in developed and emerging economies is relatively low, which is a very good choice for international investment portfolio risk diversification.
"Driven by the opening of the financial market, foreign entities have actively increased their allocation of RMB assets, and the RMB bond index has been included in the international mainstream index, which has brought a lot of incremental funds, and the cross-border use of RMB under securities investment has increased significantly." Wang Youxin said, At present, the share of RMB in global foreign exchange reserves continues to increase, and the use of RMB by international central banks and sovereign wealth funds also increases accordingly.
In the future, China's industrial chain and import and export trade will continue to maintain stable growth, the economic resilience will continue to be highlighted, the flexibility of the RMB exchange rate will increase, the two-way opening of the financial market and the interconnection mechanism will continue to improve, and the RMB's share in international payments and foreign exchange reserves will continue to be. Steady improvement.
Steady progress in RMB internationalization
The demand for allocation of RMB assets by international investors will promote the RMB to play a more important role in the international arena.
Industry insiders believe that although there are still a lot of uncertainties in the current global market, the RMB bond market will still be a favorable choice for global investors to diversify their investments.
As the interest rate spread between China and the US 10-year treasury bonds has remained high for a long time, the proportion of global investors' holdings of RMB assets is relatively low, and the opening of China's financial market to the outside world continues to deepen. Global investors will continue to increase their RMB assets.
"From a trend point of view, the proportion of RMB in global payments still does not match the size of China's economy and trade volume, and there is still a lot of room for development in the proportion of payments compared with the US dollar and the euro. The long-term development prospects of the domestic economy are promising, and the RMB is steadily growing. Promote internationalization, accelerate the construction of a dual-cycle development pattern in China, and the role of RMB in international payments, investment and reserves will continue to increase in the future." Zhou Maohua said.
According to Guan Tao, the global chief economist of BOC Securities, the increase in the share of global renminbi reserves means a higher level of internationalization of the renminbi, that is, the further consolidation and strengthening of the reserve currency function as an international currency. Recognition will be further improved.
In recent years, the driving force of RMB internationalization has changed from the initial drive of trade settlement to the two-wheel drive of "trade settlement + financial transaction".
"Even under the impact of the epidemic, under the support of China's rapid economic and trade growth, the relatively stable RMB exchange rate, and the RMB's safe-haven currency function, the internationalization of the RMB has reached a new level." Deputy Director of the International Monetary Institute of Renmin University of China, Professor Tu Yonghong said that in the future, how to further expand the scope of the use of the RMB and build an international network with depth, breadth and resilience will be the key to steadily advancing the internationalization of the RMB.
"The economy is strong and the currency is strong. The internationalization of the RMB is a natural process. The key is to speed up the construction of a new development pattern, achieve high-quality development and high-level opening, so as to continuously enhance the international market's trust and recognition of the RMB." Guan Tao said .