The Chinese central bank has announced that it will step up efforts to further internationalisation of the renminbi as well as capital account convertibility.
Vice-governor of the People’s Bank of China (PBOC) Fan Gongsheng (潘功胜) said that renminbi capital account convertibility will continue to steadily advance at the 2018 Cross-border RMB Operation Teleconference.
According to Fan the internationalisation of the renminbi will be a “major bright spot” for China’s financial reforms over the next ten years.
Fan also said that Chinas financial markets will continue to open, and that the renmibi’s international image as a constituent currency of the International Monetary Fund’s special drawing rights will further increase.
Future work will uphold the principle of “own-currency prioritisation,” and the expansion of cross-border usage of the renminbi, as well as strengthen the market foundations for exchange rate reforms and further improve the macro-prudential framework.
Observers point out that China has recently launched a raft of new policies that signal an acceleration of renminbi internationalisation and capital account convertibility.
These include the Cross-Border Inter-bank Payments System (CIPS), the re-launch and expansion of the qualified domestic institutional investor and renminbi qualified domestic institutional investor programs, a quadrupling of the daily quotas for the stock connect initiatives that link the Hong Kong exchange to bourses in Shanghai and Shenzhen, as well as the lifting of some restrictions on the foreign ownership of domestic financial institutions.
According to the “2017 Renminbi Internationalisation Report” issued by PBOC, at present the renminbi is convertible for 40 capital account transactions in 7 main categories, as well as basically convertible or partially convertible for a total of 37 accounts, covering 92.5% of all transaction accounts.