China’s attempts to internationalize the renminbi have suffered a setback amid expectations that the currency will fall in value. The volume of China’s current-account transactions settled in renminbi peaked in March and then stagnated. Their share – having surged from 1.7% in July 2010 to 13.7% in June 2011 – has declined, standing at 10.3% in June.
Dariusz Kowalczyk, strategist at Crédit Agricole, says the renminbi has still made some strides in terms of its share in global payments and trade financing, as well as its holdings by foreign portfolio investors.
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