Trials of yuan settlement under capital account may debut in Shanghai

11:25, August 20, 2010      

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Shanghai will encourage commercial banks and enterprises to start yuan settlement trials under the capital account, according to the People's Bank of China Shanghai Head Office, the Financial Service Office of Shanghai and several other government authorities.

With the prerequisite of complete schemes and controllable risks, banks and enterprises will be able to launch yuan settlement trials which are closely related to trade, including cross-border yuan financing and cross-border yuan direct investment, reported today's China Securities Journal.

The guidance formulated at the conference also encourages yuan settlement during international bidding, and urges the research of feasibility of yuan settlement in foreign capital utilization, imports of bulk commodities and foreign aid.

Ma Delun, deputy governor of the People's Bank of China, said that the central bank is pushing forward the transformation from the development of one single business to an "outgoing" strategy of yuan.

"In the process of yuan 'going out,' the construction of off-shore markets should be accelerated," Ma said.

By Aug. 16, Shanghai witnessed 26.6 billion yuan of cross-border yuan trade settlement.

The mechanism of yuan backflow will be emphasized, said Zheng Yang, director of Foreign Currency Management Department with the People's Bank of China Shanghai Head Office.

By People's Daily Online


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