A report from the People’s Bank of China (PBOC) points to a surge in the use of the renminbi for cross-border payments and receipts during the opening year of the COVID-19 pandemic.
In 2020 the renminbi cross-border payments and receipts amount was 28.39 trillion yuan (approx. USD$4.39 trillion), for a YoY rise of 44.3%, according to the “2021 Renminbi Internationalisation Report” (2021年人民币国际化报告) released by PBOC on 18 September.
According to the Report receipts and payments were balanced overall, with full year net outflows of 185.786 billion yuan.
Data from SWIFT indicates that as of June 2021 the renminbi ranked fifth in terms of international payments currencies. In the first quarter of 2021 the renminbi also ranked fifth in the International Monetary Fund’s Official Foreign Exchange Reserves (COFER).
At the end of June 2021, the holdings of domestic renminbi shares and other financial assets by offshore entities stood at 10.28 trillion yuan, for an increase of 42.8% compared to the same period last year.
“China’s economic fundamentals are excellent, and monetary policy remains within a normal range,” said the Report. “The renminbi offers higher interest spreads compared to main convertible currencies, and renminbi assets hold stronger appeal for global investors.”