Measuring Value®: The RMB abroad
Issue 2, July 2009
This issue provides the viewpoint of the Deloitte China Research and Insight Center on the RMB. Key points being made are the following:
- China is developing an "international role" for the RMB, not "internationalizing" it.
- Of the five cities in China approved to pilot RMB settlement of trade bills, four are in the Pearl River Delta.
- The RMB's use outside China, as a settlement currency and even as a local secondary currency, is already more widespread than the six countries with which formal swap agreements have been reached.
- We would expect exporters to China will begin looking for RMB settlement.
- The Asian region as a whole could establish a somewhat distinct trading currency profile from the remainder of the world.
- We believe the changes in RMB policy and practice to be extremely important for business, something that can add efficiency to MNCs and Chinese companies with supply chains that cross regional boundaries, reduce currency risk and hedging costs for companies with significant imbalances in their China trade in either direction.
- It will accelerate the increasing influence of Chinese banks in the global financial system.