The Chinese yuan's overall internationalization index stood at 3.26 as of the end of the first quarter this year, up 10.2 percent from a year earlier, according to a new report released by China's central bank.
The index reached 3.16 at the end of last year, a 5.9 percent jump from a year ago, the People's Bank of China report showed on Oct. 27. The yuan's global use has been advancing orderly since 2022, with the cross-border yuan business enhancing its ability to serve the real economy, the currency's increased financing function, and more active transactions on the offshore yuan market, the report said.
The yuan accounted for 5.8 percent of international payments as of September, up from 4.2 percent a year earlier, ranking second among global currencies, according to data from the Society for Worldwide Interbank Financial Telecommunication.
Cross-border payments and collections made using the yuan surged 24 percent to 38.9 trillion in the nine months ended Sept. 30 from a year ago, the report showed. The share of trade-in goods' cross-border payments and collections using the redback reached 24 percent from 17 percent of the total cross-border settlements in local and non-local currencies, the highest level in recent years.
Since last year, China has set up yuan settlement banks in Laos, Kazakhstan, Pakistan, and Brazil to optimize the currency's settlement networks overseas sustainably. Major offshore markets' yuan deposit balance reached a record high of about CNY1.5 trillion (USD206.5 billion) as of the end of 2022. The yuan's market share of foreign exchange trading increased to 7 percent from 4.3 percent in the last three years, with the currency climbing to the fifth spot from the eighth, a 2022 survey by the Bank for International Settlements showed.
China will advance the yuan's internationalization orderly and drive high-quality development and high-level opening up in the next phase, the PBOC report said. Measures include optimizing the cross-border yuan's basic institutional arrangement, continuously pushing for institutional opening up of financial markets, strengthening the redback's currency function in financing, and building a good ecology for the yuan's international use while holding the bottom line of no systemic financial risks.