The latest data shows that in November 2023, the share of the yuan in international payments increased from 36% to 46%, a record high in the history of the RMB. This also means that the renminbi has surpassed the yen in global payments, making it the fourth largest currency in international payments. Specifically, the top five currencies in the world are the US dollar, the euro, the British pound, the Chinese yuan, and the Japanese yen from high to low. This data also reflects the gradual improvement of the international status of the renminbi.
Behind this data, it reflects the gradual strengthening of the renminbi as an international payment currency. In recent years, the international use of RMB has continued to increase, and positive progress has been made in the development of cross-border RMB settlement, RMB investment and financing functions and RMB reserve functions. As the world's second largest economy, China's economic development and market potential have attracted much attention, providing favorable conditions for the internationalization of the RMB. In addition, the continuous upgrading and improvement of the RMB Cross-border Payment System (CIPS) has played an important role in providing efficient, convenient and secure fund payment and clearing services for various cross-border RMB businesses such as cross-border ** and financial market transactions.
The internationalization of the renminbi has been going through 14 years. Since the launch of cross-border renminbi** settlement in 2009, the renminbi's status on the international stage has gradually improved, and a series of positive results have been achieved. From the perspective of all aspects of the international use of the renminbi, we can see its development momentum.
The first is cross-border RMB** settlement. According to the data, from January to September 2023, the amount of RMB cross-border receipts and payments made by Bank of China on behalf of customers reached 39 trillion yuan, a year-on-year increase of 23%. This means that more and more enterprises choose to use RMB for international settlement, which fully reflects the activity and convenience of RMB in cross-border.
The second is the investment and financing function of the renminbi. In September 2023, the proportion of RMB in global ** financing reached 58%, rising to second place. This shows that the renminbi's status in international investment and financing activities is constantly improving, attracting more international capital inflows. This not only provides financial support for China's economic development, but also provides diversified investment options for international investors.
In addition, the renminbi's reserve function has also been internationally recognized. At present, more than 80 foreign central banks or monetary authorities have included the renminbi in their foreign exchange reserves, which once again proves the stability and credibility of the renminbi. As an alternative currency, the enhancement of the renminbi's international reserve status not only enhances the international status of the renminbi, but also provides more guarantees for China's financial security.
Although positive progress has been made in the internationalization of the renminbi, there are still some challenges. First of all, the recognition and use of the renminbi by international investors need to be improved. Although the renminbi is gradually being brought into the field of vision of international investors, there is still a gap in the international use rate of the renminbi compared to major currencies. This may be related to factors such as the international liquidity of the renminbi, the renminbi capital account restrictions, etc.
The second is the competitive pressure in the international payment market. Although the renminbi has become the world's fourth-largest international payment currency, its share is still small compared to major currencies such as the US dollar and the euro. In the competition in the international payment market, the RMB faces many challenges, including the construction of the international payment system and the unification of cross-border payment rules.
However, challenges also mean opportunities. As the world's second largest economy, China's international status and influence continue to grow, providing strong support for the internationalization of the RMB. With the rapid development of China's economy and the continuous expansion of opening up to the outside world, the prospect of RMB internationalization is still full of hope.
The renminbi's share of international payments continues to grow, surpassing the yen to become the world's fourth largest international payment currency. This data reflects the progress and momentum of RMB internationalization. From cross-border RMB** settlement, RMB investment and financing functions to RMB reserve functions, the RMB is playing an increasingly important role in the international arena. However, the internationalization of the renminbi still faces some challenges, such as the recognition of international investors and the competitive pressure of the payment market. However, with the continuous rise of China's economy and the improvement of its international status, the prospects for the internationalization of the renminbi remain promising. We look forward to the future and see the greater development of the RMB on the international stage.