- August 3, 2017
- Posted by: admin
- Category: Daily News
- Beijing is using Hong Kong as a beachhead to once again try to expand global use of the yuan, which appears to be holding its value and returning to market favour.
- The big moves in Jul 17 include the Hong Kong stock exchange’s launch of a gold futures product traded in yuan; a Sino-Russian agreement for a joint USD10bn fund to promote bilateral settlements in yuan and roubles; and Hungary’s first sale of “Panda bonds” in China to raise CNY1bn. China is also close to launching crude oil futures in Shanghai, a plan that seemed just a few months ago to have been shelved.
- The developments all took place after Beijing managed – at least on the surface – to stabilise the yuan and end market panic about the threat of a yuan crash.
- Since 2015, the central government has put the yuan’s internationalisation on the back-burner to focus more on the immediate need to maintain market stability and avoid financial turmoil.
- The yuan’s share of international payments also rose to 1.98% in Jun 17, from 1.61% in May 17 and 1.6% in Apr 17, according to the Society for Worldwide Interbank Financial Telecommunication (SWIFT). However, the yuan’s global reach is still limited, with over three-quarters of its offshore activity occurring in Hong Kong, according to SWIFT. But the city could be vital for the yuan’s future especially when the mainland’s capital account is not open.