RMB internationalization still has a long way to go
Updated: 2013-06-17 15:43
The internationalization of RMB, the Chinese currency, is currently in a high growth phase and the yuan could soon catch up with the Yen and British Pound Sterling (GPB) with appropriate measures, Beijing Times reported.
In 2012, the RMB internationalization index stood at 0.87, up 49% year-on-year, but the index for the US dollar and the Euro is at 54.18 and 24.86, said the "RMB Internationalization Report 2013" jointly released by the International Monetary Institute of Renmin University and the Bank of Communications on Sunday.
"Although this shows that the RMB is fastly becoming a global currency, its internationalization process still has a long way to go," said Chen Yulu, a member of the Chinese central bank's monetary policy committee and head of the International Monetary Institute of Renmin University.
The RMB internalization index (RII), as explained in the "RMB Internationalization Report 2013", is compiled by the International Monetary Institute of Renmin University, and indicates the proportion of RMB settlement in world trade, its credit among global foreign credit, its security within the global issuance and remaining sum of international bonds and bills, its direct investment in global foreign investment along with its foreign exchange reserves in global foreign exchange reserves.
Obstacles such as a lack of will and capacity of enterprises to use RMB for quoting prices in trades, the internationallization of financial institutes lagging behind trade activities, and the small number of RMB in direct exchange in foreign exchange markets still remain in the RMB internationalization path.
Chen said through bilateral and regional trade and using ASEAN and South Korea and Japan，the Shanghai Cooperation Organization, the BRIC nations, Latin America and the African Union and other economies as a breakthrough, it will be possible to continue to strengthen the yuan-denominated functions in international trade.
If the RMB can be used more frequently in trade with Latin America, the African Union and South Korea, the RMB internationalization index could quickly catch up with the Yen and the GPB, and the RMB would become the first member of the emerging economies to enter the international currency club, Chen added.