Chinese, overseas banks willing to increase CNY use in cross-border settlements - survey

Monday 10 November 2014 14:50 CET | News

Chinese and overseas banks are eager to increase their use of CNY in cross-border settlements, finance and investment.

Moreover, banks expect, as a consequence, that CNY will have a higher international status as a major world currency in the near future, reports.

Out of the 807 foreign companies questioned, more than 40% thought the CNY is likely to become as important a world currency as the USD and the EUR, according to a survey issued by the Bank of China. Local respondents had even higher expectations of the currencys wider use with 17% expecting it to account for at least 40 percent of outbound transaction settlements until 2020.

26% of the overseas companies said they conducted more than 15% of all import/exports settlements in the CNY, a 10% point rise on their activities in 2013. Nearly 41% of the overseas companies reported having cross-border receipts and payments made in the CNY by third-parties outside of the Chinese mainland, increasing by 10% in 2013.

About 87% of the domestic companies and 69% of the overseas companies, rising of 10 and 8% points, respectively, from 2013, said they expected to use the CNY in cross-border transactions or increase the use of the Chinese currency in future payment settlements.

The central government is now planning to extend the preferential policies for the China (Shanghai) Pilot Free Trade Zone to some other cities, which will further increase the cross-border use of the CNY. Chinas cross-border transaction settlement in the CNY has totaled 16 trillion (USD 2.6 trillion) since 2009.

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Keywords: China, CNY, cross-border, tade, finance, clearing, settlement, ecommerce, exchange, world money reserve
Categories: Payments & Commerce
Countries: World
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