China will steadily promote yuan internationalization in 2021, c.bank says

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BEIJING — China will “steadily and prudently” promote yuan internationalization in 2021, and further develop offshore yuan markets, the central bank said on Saturday.

Cross-border settlements in the local currency totalled 28.39 trillion yuan ($4.39 trillion)in 2020, up 44.3% from the previous year, the People’s Bank of China said in its 2021 yuan internationalization report.

Cross-border yuan settlements accounted for 46.2% of the overall cross-border settlements, hitting a record high, the central bank said.

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Cross-border settlements in foreign trade reached 4.78 trillion yuan last year, up 12.7% from 2019, the central bank said.

The central bank will strengthen the monitoring cross-border capital flows and prevent systemic risks, it added.

China has been trying to boost the yuan’s global clout since 2009 to reduce the reliance on the U.S. dollar in trade and investment settlements and challenge the dollar’s role as the world’s major reserve currency.

But, despite some steps toward liberalization, it maintains a tight grip on the currency due to concerns that excessive volatility could affect cross border capital flows and harm the economy.

($1 = 6.4655 Chinese yuan renminbi) (Reporting by Kevin Yao, Editing by Louise Heavens)