People’s Bank of China plans to increase global use of yuan after achieving greater cooperation with other countries and improve the infrastructure needed to support the wider use of the currency. The plans are described in the opinion of three paragraphs, announced on the official website of the financial institution in respect of the annual report on globalization of the yuan, which is to be published. The central bank did not provide other details on the findings or exactly when the report will be published.
The decision of the People’s Bank of China comes nearly an year after the country devalued its currency. The move alarmed markets globally and led to cheaper prices of stocks and commodities. The proportion of the yuan in global payments fell to 1.72% in June, which is the lowest since 2014, while deposits in the currency in Hong Kong went down to 3-year low.
According to the People’s Bank of China, the infrastructure for the internationalization of the yuan will also be improved by cross-border use under the current account, which will also be increased and funding channels in yuan will be expanded. The financial institution does not indicate how it will achieve those objectives.
The use of the yuan as a reserve currency will also increase. The International Monetary Fund will add yuan to its SDRs in October.