Yuan to replace US dollar and euro in Asia
The central bank of China has released regulations on using the Chinese yuan for international trade ahead of a pilot program, the date of which is yet to be announced.
The pilot is expected to involve the use of the yuan in trade deals between the Chinese mainland and neighbouring markets including Hong Kong, Macau and countries of the Association of Southeast Asian Nations.
The bank said using the yuan would reduce the effect of current fluctuations in the US dollar and euro: “Companies in China and neighbouring countries are facing relatively huge foreign exchange risks in trades, as the major currencies such as the US dollar and the euro have fluctuated widely in the financial crisis.
“Meanwhile, we are hearing more calls to settle in yuan as a result of the Chinese mainland’s stronger links with the neighboring countries and the Hong Kong and Macau special administrative regions.”
The new rules involve connecting the yuan settlement network with the international payments system and China’s Customs and tax information technology systems. More than 140 mainland companies will be involved in the trial.
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