RMB gains currency globally

RMB gains currency globally

BEIJING - The global use of the yuan as a trade and investment settlement currency continued to rise in 2012, as authorities loosened control on capital accounts to broaden the popularity of the currency, according to figures released on Tuesday by the People's Bank of China.

In 2012, cross-border trade settlement in yuan totaled 2.94 trillon yuan (S$568 billion), up 41 per cent from the year before, the central bank data showed.

Direct investment settled in yuan amounted to more than 280 billion yuan, an increase of nearly 153 per cent year-on-year, according to the central bank.

Outbound direct investment in yuan reached 29.2 billion yuan (S$5.7 billion), up 45 per cent from 2011, while yuan-denominated foreign direct investment grew by 177 per cent to 251 billion yuan (S$49 billion).

International payments in yuan increased by 24 per cent in November from the previous month and reached a record 0.56 per cent of the global total, the global transaction services organisation SWIFT said in a report on Tuesday.

Strengthened expectations of the yuan's appreciation in 2013 after its strong performance in recent months will also help promote the yuan's wider use, analysts said.

The yuan rose 0.03 per cent to close at 6.2244 per dollar in Shanghai on Thursday, according to the China Foreign Exchange Trade System. It touched 6.2216 on Wednesday, the highest level in 19 years.

China's foreign reserves, the world's largest, reported the smallest increase since 2003 last year, according to the central bank data released on Thursday.

As of the end of December, the portfolio went up by $128 billion to $3.31 trillion, from $3.29 trillion three months earlier.

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