According to statistics from the People's Bank of China, the amount of cross-border RMB receipts and payments nationwide will exceed 28 trillion yuan in 2020, a year-on-year increase of 44%.
Since the beginning of this year, the number of RMB cross-border payment system transactions has reached 2.12 million, with a value of 51 trillion yuan. The number of transactions has increased by 61% year-on-year, and the value has increased by 86%.
As early as 2018, the People's Bank of China and Bank Indonesia have renewed the bilateral local currency swap agreement. The size of the agreement is RMB 200 billion/IDR 440 trillion, and the agreement is valid for 3 years.
The China-Indonesia local currency settlement cooperation framework is an "upgrade" of the two countries' local currency swap agreement. The direct use of domestic currencies for trade settlement of goods and services will help further reduce the cross-border payment and settlement costs and exchange rate risks of the two countries, and accelerate the economic and trade between the two countries. contacts.
The renminbi continues to become popular in the field of cross-border trade settlement. On September 6, the People's Bank of China and the Bank of Indonesia announced the official launch of the China-Indonesia local currency settlement cooperation framework.
"This move is an important milestone in the deepening of monetary and financial cooperation between the central banks of the two countries. It will help to form a direct quotation of RMB/Indonesian rupiah, expand the use of local currency in the economic and trade exchanges between the two countries, and promote trade and investment facilitation." said the People's Bank of China.
Interviewed experts believe that the local currency settlement agreement can not only enhance the bilateral trade and settlement functions of the national currency, but also deepen international economic and trade cooperation, and it will help other countries use RMB for trade settlement. It is a further milestone in the internationalization of the RMB.
Local currency settlement "friend circle" expanded to 10 countries
Following Vietnam, Laos, Russia and other 9 countries, Indonesia has become another country along the “Belt and Road” that has established a bilateral local currency settlement agreement with my country. Since the pilot project in 2009, for more than ten years, RMB cross-border settlement has been "out of the circle" and expanded to a wider range of areas.
Fiery import and export trade and investment needs are the basis of this currency cooperation. Lian Ping, chief economist of Zhixin Investment, said that Indonesia is an important partner in the construction of the China-ASEAN Free Trade Area, and it is also an important country along my country's "One Belt, One Road" strategy. At the same time, my country is also Indonesia's largest trading partner, and the large economic and trade exchanges between the two countries have a huge demand for bilateral settlement in local currency.
"The implementation of the local currency settlement framework is a positive measure to serve the needs of import and export enterprises." Yang Ruiqi, Vice President of China and Head of Global Finance Department of UOB, said that since the first half of last year, ASEAN surpassed the EU to become China's largest trading partner. In the first half of this year, the trade volume between Indonesia and China increased by more than 30%, and the demand for direct currency exchange between the two countries is urgent. Through the local currency settlement framework, the Indonesian rupiah and the renminbi can be directly exchanged to serve the trade and investment needs of the real economy.
As early as 2018, the People's Bank of China and Bank Indonesia have renewed the bilateral local currency swap agreement with a scale of 200 billion yuan/440 trillion Indonesian rupiah, and the agreement is valid for 3 years.
From the local currency swap agreement to the domestic currency settlement cooperation framework, what positive significance does this change convey? Lian Ping said that the China-Indonesia local currency settlement cooperation framework is an "upgrade" of the two countries' local currency swap agreements. The direct use of domestic currencies for trade settlement of goods and services will help further reduce the cross-border payment settlement costs and exchange rate risks of the two countries. Speed up the economic and trade exchanges between the two countries.
Cross-border RMB business is booming
Yang Aozheng, chief Chinese analyst at FXTM, said that China and Indonesia reached a settlement agreement in currency, which may promote other ASEAN countries, including Malaysia, the Philippines and other partners that have a lot of import and export trade and investment with China to carry out similar local currency settlement in the future. The agreement deepens the cross-border use and settlement function of the RMB in the ASEAN region, further increases the proportion of the RMB in mobile trade in the international market, and promotes the internationalization of the RMB.
This move can also reduce ASEAN countries’ dependence on the U.S. dollar. Yang Aozheng said that in the past, cross-border trade and investment in ASEAN countries such as Indonesia, Malaysia, and Thailand were mainly settled in U.S. dollars. After the financial crisis, the Federal Reserve has repeatedly quantitative easing, debt reduction and interest rate hikes and other monetary policy uncertainties. , Leading to instability caused by ASEAN's excessive reliance on US dollar settlement and borrowing. Therefore, ASEAN countries have begun to study the possibility of cross-border trade and settlement in their own currencies in order to reduce the dependence on trade and financing that are denominated in US dollars.
"After Huilutong, Lulutong, and Huilu are opened up, RMB cross-border settlement will usher in a new breakthrough." Yang Ruiqi said that the introduction of the local currency settlement framework will further promote RMB cross-border payments. The direct exchange between the renminbi and the Indonesian rupiah will support the continued growth of bilateral trade.
The demand for cross-border renminbi use by foreign entities is a key driving force. According to statistics from the People's Bank of China, the amount of cross-border RMB receipts and payments nationwide will exceed 28 trillion yuan in 2020, a year-on-year increase of 44%. As the "main channel" of RMB cross-border settlement, the data of the RMB Cross-Border Payment System (CIPS) can explain the problem. On September 3, Xu Zaiyue, president of the cross-border interbank payment and clearing company, revealed that since the beginning of this year, the number of CIPS transactions has reached 2.12 million, with a value of 51 trillion yuan. The number of transactions has increased by 61% year-on-year, and the amount has increased by 86%. The growth rate is very rapid.
A research report released by Standard Chartered Bank on the 6th showed that the Standard Chartered Renminbi Global Index (RGI), which assesses the global use of the renminbi, rose for three consecutive months from May to July, and hit a record high in July, indicating that the pace of renminbi internationalization is comprehensive. Speed up. The report shows that cross-border renminbi settlement continues to expand. Among them, the performance of cross-border renminbi settlement for trade in services and foreign direct investment is "astounding": from June to July, the former rose to a peak in nearly seven years, and the latter also set a record high.
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