China’s yuan: Beijing to build solid ‘breakwater’ to curb risks amid accelerating internationalisation push
- Central bank to pursue global use of yuan while maintaining stability after Xi Jinping said it should be conducted in a ‘steady, prudent and solid’ manner
- It will also support more overseas central banks, international development institutions and multinational enterprises to issue panda bonds
Despite an accelerating pace of yuan internationalisation in the past year, Beijing has cautioned against imprudence by prioritising security amid rising external uncertainties.
“At present, the pace of diversification of the international monetary system is accelerating, business entities have increased endogenous demand for the use of yuan, and the international environment is also complex and ever-changing,” the People’s Bank of China’s (PBOC) said in the article.
“[We must] build a solid ‘breakwater’ … and maintain the bottom line of preventing systemic financial risks.”
The general impression is that to prevent risks, supervision must be strengthened
The previous wording only included “steady and prudent”, but by adding “solid”, the overall tone is becoming more conservative, suggesting risk prevention will be prioritised, said Ding Shuang, chief Greater China economist at Standard Chartered Bank.
