RMB Capital Account Convertibility in Near Sight: PBOC

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• published: 27 Jun 2015
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China is getting closer to its target of realizing the capital account convertibility of the renminbi (RMB) and the international status of China's currency is rising, People's Bank of China (PBOC) deputy governor Fan Yifei said on Friday. In a statement at the ongoing Lujiazui Forum 2015 in east China's Shanghai, Fan said several major methods will promote the capital account convertibility. He said they include opening up channels for personal cross-border investment, launching overseas investment pilots for eligible domestic personal investors, perfecting mutual stock market access between Shanghai and Hong Kong, promoting stock market access between Shenzhen and Hong Kong, and establishing effective macro-economic monitoring and management. "China is facing a remarkable achievement of international cooperation with the RMB. As of the end of May, PBOC had signed bilateral local currency swap agreements worth a total of nearly 3.1 trillion yuan with central banks in 32 countries and regions, and authorized RMB clearing banks in 15 countries and regions, so as to support China's currency to become a settlement currency within these countries and regions," said Fan. "The RMB remained the world's fifth largest payment currency as of April 2015 and its market share went up 2.07 percent," Fan added. Experts said the internalization of the RMB is the outcome of the internalization of the Chinese economy. "The RMB internalization is actually a secondary product of the success of financial reforms and the further development of the substantial economy... Ultimately, we still need to strengthen our finance, make the substantial economy powerful, ensure economic growth and readjust the economic structure," said Li Daokui, Mansfield Freeman Chair Professor and head of the Department of Finance in the School of Economics and Management at Tsinghua University. "If China is going to be as great as it's going to be and it wants to create a consumption society, it's necessary to allow financial capital to flow around the world. China cannot be a consumption society unless it internationalizes its outflows and inflows of goods and services around the world, and that's where it's moving. And the idea of moving in that direction, it needs to allow for its RMB to be a financial instrument that allows it to accomplish that," said Myron Scholes, a Nobel Prize Laureate in Economics. This year's forum, which will run until Saturday, is jointly sponsored by the PBOC, China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission and the Shanghai Municipal People's Government. The theme of this year's forum is "Financial Reform and Opening-Up in the New Normal". More on: http://newscontent.cctv.com/NewJsp/news.jsp?fileId=303078 Subscribe us on Youtube: https://www.youtube.com/channel/UCmv5DbNpxH8X2eQxJBqEjKQ CCTV+ official website: http://newscontent.cctv.com/ LinkedIn: https://www.linkedin.com/company/cctv-news-content? Facebook: https://www.facebook.com/pages/CCTV/756877521031964 Twitter: https://twitter.com/NewsContentPLUS