This photo illustration taken on Feb 9, 2017 shows Chinese 100 yuan notes in Beijing. (FRED DUFOUR / AFP)
QINGDAO - The Chinese yuan has huge room to improve its use in global systems partly due to increasing demand for yuan-denominated assets, a central bank official said Sunday.
"Yuan's international status is far lower than the proportion of the Chinese economy in the global economy, which means enormous room for improvement in the currency's global use," Yin Yong, vice governor of the People's Bank of China, said at a forum held in Qingdao, east China's Shandong Province.
The currency only accounts for around 1.8 percent of international clearing, 2 percent of foreign exchange (forex) transactions, and over 1 percent of forex reserves, Yin said.
In contrast, China, the world's second largest economy, boasts more than 15 percent of global GDP and around 11 percent of trade.
Thanks to solid economic growth, Yin believes there is demand for more yuan-denominated assets in financial markets and the real economy worldwide.
Yin said the Belt and Road Initiative provides a significant opportunity for internationalization of the yuan. "In 55 countries along the Belt and Road, payment in yuan only makes up less than 5 percent of total trade volume."
Along with opening up in China's capital market, yuan's global drive is moving forward in a steady pace. The International Monetary Fund in October 2016 officially added the yuan to its Special Drawing Rights, evidence of the currency's global potential.
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