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Recently, according to data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the proportion of RMB transaction usage rose to 4.61% in November, compared with 2.37% in the same period last year, and the global transaction usage ranking also rose to fourth.
Specifically, the renminbi's share of global payments rose to 4.61% in November from 3.6% in October, surpassing the yen's share from 3.91% to 3.41%. This is the first time since January 2022 that the renminbi has surpassed the yen to become the world's fourth-most commonly used payment currency after the US dollar, the euro and the British pound.
Chi Lo, senior strategist for Asia Pacific at BNP Paribas Asset Management, commented that there have been a series of positive developments in favour of the international use of the renminbi this year, and that the November SWIFT data "may even be the beginning of a slow upward trend in the renminbi's share".
-- The scale and proportion of RMB foreign exchange reserves have grown steadily
The size and proportion of the renminbi as the global foreign exchange reserve currency have increased steadily. So far, more than 70 foreign central bank institutions have entered the mainland's interbank bond market, and monetary authorities in more than 75 countries and regions have included RMB in their foreign exchange reserves. As of the first quarter of 2021, the renminbi had foreign exchange reserves of US$287.5 billion, or 2.5%, from 2016, when it joined the SDR, an increase of 1.4 percentage points.
-- The development trend of RMB internationalization is clear
In general, China has gradually promoted the internationalization of the renminbi in accordance with the three-step path of "periphery, regionalization, and internationalization". Under the premise that China's capital account is not open and inconvertible, the internationalization of RMB started from the settlement of bilateral trade, and the process of RMB peripheralization is still deepening. So far, the renminbi has initially met the basic conditions for the Asianization of the renminbi. For a long period of time in the future, the internationalization of the renminbi will advance in the direction of forming a new international monetary system with a "three-legged support", and the stability and effectiveness of the global financial market will be strengthened.
-- The signing of the RCEP provides a broad market and application scenarios for the internationalization of the RMB
The signing of the RCEP has increased more real demand for the use of RMB in the scenarios of cross-border e-commerce, foreign aid and construction, investment in financial services and trade of small and medium-sized enterprises, which can further play the functions of international settlement and financial transactions of RMB, provide a broader market for the use of RMB, and add new impetus to the internationalization of RMB.
The relevant person in charge of the Macro-Prudential Administration of the People's Bank of China said that the internationalization of RMB should follow the trend, continue to adhere to the principle of market-driven, mutual benefit and win-win, pay more attention to improving quality and level, focus on trade and investment facilitation, continuously optimize basic institutional arrangements such as cross-border RMB investment and financing, transaction settlement, etc., enhance the ability of cross-border RMB business to serve the real economy and promote high-quality development, provide diversified currency choices for economic entities, and solidly promote the international use of RMB. At the same time, we will continue to seek progress while maintaining stability, continuously improve regulatory capabilities and risk prevention under open conditions, build a solid "breakwater", and ensure that the internationalization of the RMB is steadily advancing on the premise of maintaining the bottom line of safety.
Prospective Economist APP Information Group
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