Key facts
- China's central bank plans to keep the yuan exchange rate basically stable.
- The PBOC aims to expand the yuan's use in international trade and investment.
- The 15th Five-Year Plan (2026-2030) will guide efforts to increase the yuan's global profile.
- Reforms will focus on capital market access, capital account liberalization, and exchange rate flexibility.
- Measures will be introduced to deepen the offshore renminbi market and enhance liquidity.
- Hong Kong will be reinforced as the preeminent offshore hub for the renminbi.
China's central bank has outlined plans to significantly expand the international use of the yuan and maintain its exchange rate stability as part of its upcoming five-year plan. The People's Bank of China (PBOC) stated its commitment to fostering a sound environment for using and holding the Chinese currency, aiming to enhance financial security and the resilience of the global monetary framework.
During the 15th Five-Year Plan period (2026-2030), China is expected to pursue a gradual and prudent approach to renminbi internationalization. Key reforms will include broadening capital market access for global investors, deepening capital account liberalization under prudent oversight, and enhancing exchange rate flexibility. The PBOC intends to improve the infrastructure and conditions for both domestic and overseas entities to hold and use the yuan, recognizing the growing endogenous demand for its use amid global monetary system diversification.
Specific measures will focus on integrating investment channels to attract more foreign investment into China's onshore financial market, refining cross-border trade and investment settlement policies, and encouraging overseas institutions to issue yuan-denominated panda bonds. Furthermore, the PBOC will introduce initiatives to deepen the offshore renminbi market by enhancing liquidity and expanding the supply of RMB-denominated assets. This includes strengthening connectivity with onshore markets and collaborating with Hong Kong authorities to build a comprehensive financial trading platform, reinforcing the city's role as a primary offshore renminbi hub.
Experts anticipate that the yuan's global influence will continue to grow, potentially positioning it as another major reserve currency alongside the dollar, euro, and yen. The currency has shown resilience and stability, making it attractive for foreign companies seeking to diversify away from the US dollar. The PBOC's efforts are seen as crucial for safeguarding China's financial security and contributing to a more robust global monetary system.