The central bank of China and the State Administration of Foreign Exchange on Saturday jointly released draft guidelines, expanding the scope of activities available to foreign yuan loans from domestic banks.
This is a new new gesture to show the country’s openness in the banking sector and its ambition to advance the internationalization of the yuan.
The project currently indicates that the scope of yuan lending for foreign projects of domestic banks is relatively narrow, and that lending is limited to companies related to foreign direct investment, overseas contracted projects, and buyer credit to export.
The project relaxes these restrictions, which means that foreign lenders are no longer limited to “exit” projects.
On Saturday, China‘s central bank released an annual report on the internationalization of the yuan, saying that despite the pandemic, the total amount of yuan cross-border receipts and payments in 2020 reached a record high of 28.39 trillion yuan ($ 4.39 trillion), year-on-year increase of 44.3 percent.
The report says that at the end of June, about 10.26 trillion yuan of financial products, including yuan stocks, bonds, loans and deposits, were held by foreign subjects, an increase of 42 , 8% year-on-year.
SWIFT data showed that yuan payment amounts accounted for 2.5 percent of all currency payments, up 0.7 percentage points from last year.