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China to boost global renminbi
26 February 2013
The speed with which the renminbi is moving towards internationalisation will surprise many, says Peter Garnham
The pace of the push to internationalise the renminbi has accelerated faster than many had predicted, with Chinese policymakers showing increasing eagerness to increase the use of its currency in international transactions and reduce the country's reliance on the dollar.
In the past the country had focussed liberalisation efforts on the current account (income) rather than the capital account (ownership of assets) but there is growing feeling that this is set to change. The move reflects investment in both directions.
“Signs are emerging that Beijing policymakers are going to speed up the opening of the country’s capital account,” says Qu Hongbin, chief economist greater China at HSBC. “We think the pace of progress in the next few years will be much faster than many expect and now believe that the renminbi will become a convertible currency within five years.”
That may appear to be a bold prediction, but...
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