(Reuters) – The Chinese yuan could potentially become a world reserve currency as the country gears up to boost its global clout, deputy central bank governor Yi Gang said in remarks published on Thursday.
“Why do global investors like to hold a certain currency and make investments in a market? They mainly consider its safety, returns and depth, and the liquidity of the market. China’s market and the yuan have full potential,” Yi said in an article published in the official Financial News.
Beijing has vowed to open its capital account in a selective manner and is stepping up efforts to internationalize the yuan.
“We need to quicken the pace of internationalization of our capital markets to improve the global status of the yuan,” Yi added, without elaborating on how to move toward that goal.
The People’s Bank of China said on Wednesday that it would allow importers and exporters across the nation to settle trades in the yuan this year, a move that would give yuan a bigger role in the global financial markets.
(Reporting by Aileen Wang and Kevin Yao; Editing by Jonathan Hopfner)
The yuan (sign: ¥; code: CNY, Chinese: 元, pronunciation [ˌjuːˈɑn] or [ˈjuːən] (help·info)) is, in the Chinese language, the base unit of a number of modern Chinese currencies. The distinction between yuan and Renminbi (RMB) is analogous to that between the pound and sterling; the pound (yuan) is the unit of account while sterling (renminbi) is the actual currency.
A yuán (元) is also known colloquially as a kuài (块 – “lump”, originally of silver). One yuán is divided into 10 jiǎo (角) or colloquially máo (毛—”feather”). One jiǎo is divided into 10 fēn (分).
The symbol for the yuan (元) is also used to refer to the currency units of Japan and Korea, and is used to translate the currency unit dollar; for example, the US dollar is called Měiyuán (美元), or American yuan, in Chinese. When used in English in the context of the modern foreign exchange market, the Chinese yuan most commonly refers to the renminbi (CNY), which traded for US$0.1517 on February 9, 2011.