The Chinese government makes large efforts to boost his currency as a global currency. After the repression of capital outflows and the devaluation in 2015, the renminbi is growing again.
The unprecedented share of the yuan in world trade was 2.8% three years ago, according to Bloomberg. Its proportion decreased to 1.7% recently, but it is up again now. the major reason is that China's foreign exchange reserves, the largest in the world, have been increased this year. Yuan also experienced its largest rally in 10 years in the first quarter.
"There will certainly be more use of currency in international transfers this year. The currency rate will be more affected by world financial markets. Offshore investors are going to become a more significant driver for onshore bonds as well," according toJi Tianhe, BNP Paribas SA's China Fixed Income and Currency Strategist.
Beijing has raised the share of the yuan with its main trading partners such as Iran and Russia, which are also subject to US sanctions. Russia and China have an investment fund, valued at more than 10 billion dollars, expressed in yuan.
The introduction of yuan-backed oil futures is also set to support the renminbi OPEC's third major producer, Iran, is selling its brut to China in renminbi after dumping the US dollar in reaction to the threat of re-imposing penalties...
Source: livetradingnews.com