The Use of the Chinese currency renminbi (RMB), or the yuan is expected to increase going forward, HSBC's Asian Economics Research co-head Frederic Neumann said on Monday.
He told reporters after a media briefing on Asian outlook that the RMB internationalization is a gradual process, but "we have seen progress in areas such as the inbound investment."
Enlarging trade and investment between China and the Association of Southeast Asian Nations under the China-proposed Belt and Road Initiative will spur the RMB usage, he said.
According to the expert, trade settlement cost and convenience, and risk diversification will be the drivers to facilitate the yuan usage moving forward. he said "some central banks are holding RMB as reserves."
HSBC's RMB business development global head Candy Ho also highlighted that Malaysia has been supporting the yuan in both cross-border trade, investment and financing.
With greater economic trade ties between China and Malaysia, she foresees more demand on RMB in Malaysian market.
"Chinese is not only participating in infrastructure projects in Malaysia, but also using Malaysia as a hub for regional expansion," she said.
Ajay Sharma, the bank's global trade and receivables finance regional head, believed that China's influence in global commodity market will be a key factor to drive the RMB usage.
Although the world commodity market has been dominated by the U.S. dollar in decades, he expects the trend to change as China is a big trading nation both as consumer and exporter now.
Proposed by China in 2013, the Belt and Road Initiative refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road, aiming at building a trade and infrastructure network connecting Asia with Europe and Africa along the ancient trade routes of Silk Road.