Baku. 8 October. REPORT.AZ/ China has launched an international payment system, a step forward in internationalising its currency, the renminbi or yuan, Report informs, China state media reported on Thursday.
The first phase of the China International Payment System (CIPS) launched in Shanghai would provide capital settlement and clearing services for cross-border yuan transactions for financial institutions domestically and abroad, Xinhua News Agency said.
This would also enhance efficiency and increase global use of the Chinese currency by cutting costs and processing times, said Fan Yifei, People's Bank of China vice president.
Xinhua reported cross-border yuan clearing previously had to be done either through one of the offshore yuan clearing banks in places like Hong Kong, Singapore and London, or else with the help of a corresponding bank on the Chinese mainland.
It quoted Fan as saying CIPS will have a significant role in shoring up China's real economy and promoting the "going abroad" strategy of domestic enterprises.
The system, developed and administered by the central bank, enables market participants outside China to clear yuan transactions with their Chinese counterparts directly from 9am to 8pm during any working day under a coding format in line with international practice.
According to global transaction services organisation SWIFT, China's yuan became one of the world's top five payment currencies in November last year, overtaking the Canadian dollar and the Australian dollar.
China has accelerated the pace of yuan internationalisation in recent years. The central bank designated 10 official yuan clearing banks last year, bringing the total to 14 globally that can clear yuan transactions with China, Xinhua said.