China hopes to make the yuan one of the currencies in the IMF's basket of currencies. (Photo : Pixabay)
By the end of 2020, the yuan will be a convertible and freely traded currency, according to an article quoting the head of China's central bank, as reported by Shanghai Daily.
More than a third of China's total payments will be settled in yuan within the same timeframe, according to a quote of Zhou Xiaochuan, governor of the People's Bank of China, in a People's Daily article. The article outlined China's financial reform targets for the next Five-Year Plan period.
"We will drive the yuan to be a convertible and freely usable currency and facilitate its use within neighboring countries and emerging markets, before extending to international financial centers and developed countries," said Zhou.
The yuan is set to be included among the basket of currencies of the International Monetary Fund (IMF), a key step in China's goal to make it an accepted global reserve currency, along with the U.S. dollar, the Japanese yen, the British pound and the euro.
China hopes to use its Belt and Road initiative to achieve its goals. The initiative aims to boost China's trade and investment links with countries across Asia, Europe and Africa, as well as relax cross-border foreign exchange regulations, said Zhou.
Zhou also stressed the importance of building an effective financial security system. He described it as "essential to national security."
The central bank has 17 major targets for the Five-Year Plan, with currency reforms being only one of them.
Other planned reforms include boosting the role of bonds and equity markets in corporate fundraising and opening more private banks.
