In March of this year, China reached a new stage in its efforts to reduce dependence on the dollar: the use of the Chinese yuan in international transactions exceeded that of the greenback for the first time. The share of the Chinese currency in global payments and receipts reached a record 48% at the end of March, compared to almost zero in 2010. Bloomberg Intelligence research, based on data from the State Administration of Foreign Exchange, confirms these facts. The dollar’s share for the same period decreased from 83% to 47%.
Stephen Chiu, Chief Asia Foreign Exchange and Rates Strategist at BI, believes that “the growth in the use of the yuan may be a natural consequence of China opening up its capital account. This will lead to an increase in the inflow of Chinese bonds and an outflow of Hong Kong stocks”.
