The People’s Bank of China is the latest proof that the Chinese renminbi is gaining international recognition as a significant currency.
The bank is now allowing all Chinese merchants that import and export goods to settle their trades in their own currency.
This is a landmark step for the renminbi’s internationalisation, according to David Sear, chief operating officer of Western Union Business Solutions, which last year had added the renminbi to its Global Clearing Network.
“It brings the renminbi that much closer to becoming a real challenger to the dollar as a global reserve currency and marks the latest in a series of moves that clearly demonstrates a fully international RMB is on its way sooner rather than later.
“We are witnessing a global currency shift that will profoundly influence how international business is conducted. This is the biggest change to international remittances since the arrival of the euro,” he said.
According to Sear, “it is now as easy for British companies to trade in China’s local currency as it is to trade in USD. British companies who are quick to adapt to RMB settlement will be well-placed to gain a global competitive advantage over those who are behind the curve.”