China will steadily liberalize the yuan's use on the capital account, which makes the currency convertible for investment purposes, as part of the country's strategy to make the yuan a global currency, the central bank said on Monday.
The yuan's globalization is a long-term strategy that demands consistent and steady efforts, Yi Gang, the deputy central bank governor, told participants at an insider meeting. China's economy is still proceeding on a stable track, he said, adding the market forces that drive the yuan's global use remain.
Efforts should be made to enhance the yuan's role in investment, reserves and financial transactions. When pushing for the currency's use in cross-border transactions, steady efforts should be made to make it convertible on the capital account, he said.
The central bank also underlined the importance of enhancing risk prevention and vowed to step up market supervision. China has been pushing for the yuan's global use, as the world's largest trading nation looks to lower transaction costs in international trade, which is mostly settled in U.S. dollars at present. Making the yuan convertible on the capital account is essential to reaching this target.
China currently make its currency fully convertible on the current account for trade purposes, but is yet to fully open its capital account for investment purposes.