Shanghai (CNS) -- The yuan offshore trade settlement will not affect China's monetary policy, said Wu Xiaoling, a former deputy head of the Chinese central bank, on September 9 during a symposium in Shanghai.
When asked if the yuan offshore trade settlement is used mostly on imports, whether the growth of foreign exchange reserves will affect China's monetary policy, Wu said the concern is unnecessary.
"If a country's money wants to go international, trade deficit is one option and the other option is direct investment," she said.
One the one hand, offshore renminbi will not affect the domestic monetary environmenttoned ladies. on the other hand, it will replace overseas foreign exchange investment. It will cut the central bank's demand for purchasing foreign exchanges under the capital account, so there's no impact on the economics, explained Wu.
Statistics show since July of 2009 when China launched a pilot program for cross-border yuan trade settlement, the total settlement has exceeded 2 trillion yuan (315.5 billion USD).
She listed three channels through which yuan circulated overseas can flow back: the Chinese bond market, allowing foreign investors to use investments denominated in yuan, and allowing the Qualified Foreign Institutional Investors (QFII) to invest into China's securities market through funds.
"This one [the third] hasn't been realized yet, but we're discussing it," said Wu, member of the Standing Committee of the National People's Congress (NPC) and deputy director at the Financial and Economic Committee of NPC.
Shanghai and Hong Kong ought to work together to promote the use of yuan in cross-border trade settlement, Wu added.
beguiling vixens.
