In years to come, Belt and Road Initiative related trade and financing settlements will probably increase the interest in RMB in the global markets. In addition, the Chinese government is encouraging domestic financial institutions to conduct foreign financing business in RMB while giving financial services to Belt and Road Initiative related projects in an attempt to boost the acceptance of its currency.
To encourage the utilization of RMB in cross-border trade settlements and investments, China has signed bilateral currency-swap agreements with some Belt and Road countries, including Thailand, Malaysia and Singapore. Moreover, the People’s Bank of China (PBoC) has named RMB-clearing banks in an increasing number of nations, and several of them such as Malaysia, Thailand and Cambodia have adopted RMB as an official reserve currency. These efforts signal China’s strong urge to push forward the RMB internationalization.
The Belt and Road Initiative could sustain China’s medium-term economic development prospects and may support the value of RMB against other currencies.
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