Stronger confidence in yuan's global use: report

Updated 2018-02-01 13:46:00 Xinhua

Expectations of China further opening up its financial sector this year have boosted bankers' and experts' confidence in global use of the renminbi, according to a China Daily report.

A survey of the Bank of China said 76 percent of respondents from 3,134 overseas enterprises and 118 financial institutions in 25 countries and regions believed the yuan would play a role as important as other major currencies, including the U.S. dollar, British pound, euro and Japanese yen.

That proportion rose from 72 percent from 2016, reflecting improved confidence in the yuan's global usage.

More than 60 percent of the surveyed said they will increase use of yuan in global trade, investment and foreign reserves.

In 2017, the yuan remained the world's sixth-largest currency in payments and seventh-largest in foreign exchange reserves, according to the paper.

"The market's demand for yuan-denominated assets will be huge in the future," said Zhang Qingsong, vice-president of the Bank of China, noting that plans to launch crude oil futures in Shanghai will support the yuan's use in setting commodity prices in global trading.

Experts forecast that the yuan's exchange rate will remain relatively steady this year, but it will float more freely as the market plays a stronger role in deciding its value.

The first month of 2018 witnessed the yuan's onshore exchange rate strengthen by 3.38 percent against the U.S. dollar, the biggest monthly gain since 1994.

The reading was also over half of the 6.72 percent strengthened for the whole 2017, the sharpest annual appreciation in nine years.

However, the fundamental reason behind the yuan's rally is a robust Chinese economy, which boosts investor confidence in the currency, said Guotai Junan Securities.

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