China to expand cross-border RMB settlement plan
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The People's Bank of China (PBOC), China's central bank, plans to expand its pilot plan for using the currency of renminbi in cross-border trade to more regions this year, an official with the bank said Tuesday.
"The PBOC aims to expand its pilot plan nationwide this year and introduce a trial project for cross-border renminbi settlement," Li Bo, director of the Monetary Policy Bureau of the PBOC, said at a meeting held by the China Banking Association.
The Chinese government first allowed cross-border renminbi settlement trials in July 2009 to encourage the internationalization of the Chinese currency.
In June of last year, the government expanded the project to 20 provincial regions.
"The objective of cross-border renminbi trade settlement is to make trading and investing easier and change the currency into a feasible market option through the introduction of supporting policies," Li said.
According to official figures, total cross-border renminbi transactions hit 506.3 billion yuan (77.69 billion U.S. dollars) in 2010, and such transactions reached 360.3 billion yuan in the first quarter of this year.
To facilitate trade and investment, the central bank will continue to promote off-shore renminbi trade settlement and open up the domestic financial market to allow more overseas banks to enter China's interbank market, Li said.
In addition, the central bank will sign currency swap deals with more countries to encourage currency cooperation and promote bilateral trade and investment, he added.
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