Yuan settlement measures released

• Source: Global Times
• [22:23 July 02 2009]
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 Illustration: CFP

By Wang Xinyuan

Cross-border trade may now be settled in renminbi, according to regulations issued for selected pilot cities by China’s central bank yesterday.

The new Administrative Rules on Pilot Program of Renminbi Settlement of Cross-border Trade Transactions posted yesterday on the official website of the People’s Bank of China (PBC) outline the regulations for renminbi settlement in approved pilot cities.

The measures follow the State Council’s announcement in early April of planned pilot programs for renminbi settlement in the cities of Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan.

“Cross-border trade settlement in renminbi is an initial but important step toward the renminbi’s internationalization,” Ba Shusong, a senior researcher with the State Council Development Research Center, told the Global Times.

The significance of renminbi settlement for cross-border trade is to reduce the reliance on some already unstable international currencies and to lay a strong foundation for renminbi as a preferred currency for regional investment and reserves in the future, according to Ba.

China has promoted the use of renminbi in international trade since Chinese Premier Wen Jiabao expressed concerns in March over the safety of China’s US dollar reserves.