What are the advantages of increasing the settlement ratio of RMB?

The increase in the RMB settlement ratio can bring the following advantages:

1. In terms of business promotion, it can change the fragile structure of China's foreign trade economy that is "vulnerable to exchange rate risks" and enhance China's position in the world.

2. In terms of cross-border settlement business, it is conducive to attracting more and more enterprises to join the ranks of RMB settlement business, so as to realize the payment and settlement functions of RMB as an international currency, such as strong convenience and low exchange cost.

RMB settlement is mainly divided into ** mode and clearing mode. Among them, the ** model mainly refers to the mode in which a Chinese-funded bank entrusts a foreign-funded bank as its overseas ** bank, and an overseas enterprise opens a RMB account with the entrusted bank of a Chinese-funded enterprise. The liquidation model mainly refers to the business between the domestic head office and overseas branches of Chinese-funded banks, that is, overseas enterprises open RMB accounts in overseas branches of Chinese-funded banks.

3. Advantages of RMB settlement.

In terms of business promotion, the RMB cross-border settlement business will change the fragile structure of China's foreign trade economy that is "vulnerable to exchange rate risks", which will create a favorable external environment for promoting the opening of the RMB exchange rate and capital account, and will also help enhance the effectiveness of China's monetary policy in implementing its own "economic growth and price stability" goals.

In terms of cross-border settlement business, it is conducive to the "export" of RMB and the resulting external network effect, that is, the economies of scale shown in RMB settlement will attract more and more enterprise resources to join the ranks of RMB settlement business, so as to realize the payment and settlement functions of RMB as an international currency, such as strong convenience and low exchange cost.

Fourth, the development status of RMB settlement business.

At present, most countries such as the five Central Asian countries and Russia have realized cross-border RMB settlement, among which the proportion of RMB settlement between China and Russia has shown a significant upward trend. According to the relevant data of the customs, from January to April 2022, the total foreign trade between China and Russia reached 343.2 billion yuan! China has accumulated a lot of experience in foreign exchange settlement in rubles, and the interest of Russian enterprises in RMB settlement has also increased significantly, and Russia announced that it will pay for oil and gas in RMB, which will increase the proportion of China and Russia in the use of RMB settlement!

The increase in the proportion of RMB settlement between China and Russia is conducive to further expanding the first-class markets of the two countries, and provides a good condition for China's first-class businessmen and manufacturers to expand the Russian market.

Clause. 1. The use of RMB for settlement is conducive to the promotion of RMB in the international community and the enhancement of China's influence. The status of a country's currency in the international arena is also a symbol of national strength. The Belt and Road Initiative and the RMB going out are important measures for national development.

Clause. Second, it is conducive to avoiding exchange rate risks and reducing the operating costs of enterprises. Due to the continuous fluctuation of the exchange rate of RMB against foreign currencies, the exchange rate risk brought to import and export enterprises is a problem that cannot be ignored.

If the RMB settlement is used, it will be conducive to the expansion of production scale, the increase of technological innovation and transformation, and the enhancement of the ability of export to earn foreign exchange.

The Ministry of Commerce and six other departments jointly issued the Guiding Opinions on the High-Quality Implementation of the Regional Comprehensive Economic Partnership (RCEP) Agreement (hereinafter referred to as the "Guiding Opinions"). The "Guiding Opinions" pointed out that the supporting role of RMB settlement in the development of investment should be improved. Support financial institutions to innovate RMB trading, investment and hedging products, and provide convenient and efficient cross-border RMB financial products and services for market entities.

The "Guiding Opinions" covers six aspects, including making good use of the opening commitments and rules of the agreement, promoting the upgrading of the manufacturing industry and enhancing industrial competitiveness, promoting the cooperation and transformation of standards, improving the financial support and supporting system, making good use of the rules according to local conditions, and continuing to do a good job in supporting services.

Among them, the "Guiding Opinions" require in "improving the financial support and supporting policy system" to further improve the quality and efficiency of financial services for ** investment. Combined with the implementation of RCEP, encourage and guide financial institutions to innovate financial products and services in accordance with the principles of marketization and business sustainability, increase credit support for foreign trade enterprises, support qualified foreign trade enterprises to expand direct financing channels, and optimize credit insurance products and services for small and micro enterprises and private enterprises in the field of foreign trade.

Improve the supporting role of RMB settlement in the development of ** investment. Promote more RMB settlement of investment activities in the RCEP region, help market players reduce exchange costs, and avoid the risk of exchange rate fluctuations. We will continue to optimize policy arrangements and infrastructure construction to provide a favorable institutional environment for the cross-border use of RMB.

Guide financial institutions to improve the level of financial services, support financial institutions to innovate RMB trading, investment and hedging products, and provide convenient and efficient cross-border RMB financial products and services for market entities.