RMB Index reaches record high
February 24, 2014 Category Finance, Weekly
The Cross-border RMB Index (CRI) of the Bank of China (BOC) – designed to measure renminbi activity in the global market – rose by a record 56 points in the fourth quarter of 2013 year-on-year to 228, breaking the threshold of 200 for the first time. In the fourth quarter last year, renminbi settlement in China’s imports and exports increased by 30% over the previous quarter, pushing the CRI up by 20 points. Total cross-border renminbi settlement was CNY5.16 trillion, up 61% year-on-year. Under the current account, the proportion of yuan-denominated merchandise trade went from 5.5% in 2011 to 11.7% in 2013. In terms of the capital account, renminbi-denominated direct investment increased by 130% from the end of 2012. In 2013, about CNY500 billion entered overseas markets through trade or investment. It is estimated that the renminbi in overseas market may have exceeded CNY1.5 trillion. According to BOC statistics, dollar activity in the fourth quarter last year increased by 2% from the second quarter. Meanwhile, euro, pound and yen activity decreased. In comparison, renminbi activity increased by 23% during the same period. Another record rise in the currency’s profile is expected this year. In a survey among 3,000 global companies in 2013 by BOC, among the overseas companies surveyed, 61% said they would begin using renminbi or increase its proportion for settlement. BOC continues to take the lead in yuan-denominated settlement. In 2013, BOC’s cross-border renminbi-denominated settlement exceeded CNY3.98 trillion, rising by 60% year-on-year. Its domestic settlement was CNY1.77 trillion, taking up one-third of the market, much greater than other commercial banks.
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