China has been pushing for yuan’s global use, as the world’s largest trading nation looks to lower transaction cost in international trade, which is mostly settled in US dollars at present. Renminbi has joined the ranks as one of the most-widely used currencies in global markets.
CNBC reports that the renminbi stands as the world’s largest trade-finance currency after the US dollar. China’s currency is expected to surpass the Japanese yen as the world’s 4th-most used international currency.
Data released by the International Monetary Fund (IMF) showed that in 2014 the renminbi had accounted for 2.96 percent of worldwide trades, along with total direct investments valued at US$ 1.05 trillion.
Moreover, $94 billion of official assets were already held in renminbi at the end of 2014, accounting for 1.1 percent of global foreign exchange reserves.
The IMF last year agreed to include renminbi into its Special Drawing Rights (SDR) currency basket, as a clear representation of the reforms in China.
Last week, the Monetary Authority of Singapore (MAS) announced that it will include renminbi investments as part of its official foreign reserves from June.
Rani Jarkas, Chairman of Cedrus Investments, an investment pioneer with years of financial experience in Asia, said, “As China plays an increasingly important role on the international stage, RMB is becoming truly global and this is set to continue.”