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Foreign firms’ use of yuan climbs

11/06/2014| 6:35:32 PM|

The yuan is used by 26 percent of foreign trading companies to settle more than 15 percent of their transactions.

THE yuan is increasingly used by foreign companies to settle cross-border transactions and meet financing needs as China continues to internationalize the currency, the Bank of China said in a report yesterday.

The yuan is used by 26 percent of foreign trading companies to settle more than 15 percent of their transactions, the report said. Only 16 percent of the respondents used the yuan for settlement according to last year’s survey.

BOC said 87 percent of domestic companies and 69 percent of foreign firms plan to use the yuan increasingly in their trading, up 10 percentage points and 8 percentage points respectively from last year.

For 41 percent of the foreign respondents, the yuan could become a very important global currency on par with the US dollar and euro, up 10 percentage points from last year.

“After five years of efforts to internationalize the yuan, more and more foreign companies have recognized the yuan as a potential international currency,” the report said.

The BOC survey covered 3,162 domestic and foreign companies this year, with 807 being foreign enterprises in 22 countries and regions.

The report also revealed that 63 percent of domestic firms and 38 percent of foreign companies have used yuan-denominated cross-border products. No comparative figure was available from last year’s survey.

The yuan now trades directly with the Singapore dollar, euro and the British pound after similar links were set up with the US, Australian and New Zealand dollars as well as the yen.
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TAGS: RMB | foreign firms | currency
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