The renminbi currently ranks fourth as a medium for international payments, according to a new report from the People’s Bank of China (PBOC).
In 2021 banks processed a record-breaking 36.6 trillion yuan in renminbi cross-border transactions on behalf of clients, for a year-on-year increase of 29%, according to figures from PBOC’s “2022 Renminbi Internationalisation Report” (2022年人民币国际化报告).
SWIFT data indicates that the renminbi’s share of international payments rose to 2.7% as of December 2021, surpassing the Japanese yen to become the fourth most important international payments currency after the US dollar, the euro and the pound.
Figures from PBOC indicate that this figure further increased to a record high of 3.2% in January 2022.
As of the end of 2021 offshore investors held 10.83 trillion yuan in domestic renminbi-denominated stocks, bonds, deposits and other financial assets, for a YoY rise of 20.5%, while renminbi deposits in key offshore markets approached 1.5 trillion yuan.
The PBOC report said that the next step would be to “steadily and cautiously drive renminbi internationalisation, further consolidate the systems and arrangements for cross-border renminbi usage; satisfy demand for renminbi usage by the real economy, drive higher-level bi-directional financial market opening, and drive positive cycles between onshore and offshore renminbi markets.”
PBOC also said that it would “continue to improve a cross-border capital flows macro-prudential regulatory framework that integrates domestic and foreign currencies; establish and improve cross-border capital flow monitoring, assessment and early warning systems, and firmly guard the bottom line against the onset of systemic financial risk.”