KUALA LUMPUR: Business and trade conducted in yuan, or renminbi, between Malaysia and China will increase significantly in the future, following the higher usage of the currency last year coupled with the rising positive factors that helped drive demand for the currency, a study shows.
HSBC Bank Malaysia Bhd managing director Alvin Kong said that transactions in yuan last year between the two countries, using the standard format for Business Identifier Codes, also known as SWIFT CODE, showed a growth of over 50% year-on-year.
“We expect the trend to increase and the 50% growth y-o-y can continue,” he said at a press confrence after unveiling the findings of the bank’s Renminbi Internalisation Study 2016 in Kuala Lumpur on Friday.
The study, which involved 1,600 decision-makers in 14 countries, showed 24% of the respondents said their firms were using yuan for cross-border businesses globally.
In Malaysia, the usage of yuan for business settlement has risen by 6%-20% versus 14% last year.
The study also revealed that 36% of the respondents foresaw thye yuan will rise as the international trading currency in the next five years.
Kong said the recognition of yuan as the fifth global reserve currency by the International Monetary Fund also marked a new level of acceptance of it on the world stage.
He said the opening up of China’s interbank bond market to foreign investors recently, as well as projects undertaken via the Belt and Road Initiative that encouraged the use of renminbi had also spurred its demand. – Bernama