China plans to expand settlements of international trade using yuan to as many as 18 more provinces and cities to meet rising demand from companies, two bankers involved in the program said.
Cross-border transactions using the currency have been allowed in Shanghai and Guangdong since July last year, to reduce reliance on the U.S. dollar. Authorities may permit them in areas including Guangxi in the south and Heilongjiang in the north, said the executives at Chinese state-controlled banks, who asked not to be identified before a government announcement. A statement may come as soon as this month, said the bankers, who were briefed by regulators this week.
“More and more Chinese companies want to use the yuan in international trade because of higher volatility in foreign currencies,” said Shi Lei, an analyst in Beijing at Bank of China Ltd., the nation’s third-largest lender by market value. “The next step would be to provide more investment channels for overseas companies to invest yuan.”
The new rules may let Chinese companies settle trade in goods and services in yuan with counterparties around the world, the two bankers said. The municipalities added to the program include Beijing, Tianjin and Chongqing, while the provinces include Shandong, Inner Mongolia, Liaoning, Jilin, Fujian, Sichuan, Xinjiang, Yunnan, Zhejiang and Jiangsu, they said.
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