New Detailed Plans Released to Help Convertibility of the Yuan
The State Council is calling for the drafting of new detailed plans that is said to help achieve full convertibility of the yuan. This raised the prospect of accelerating the reforms that will free up the currency.
Premier Li Keqiang was quoted during a regular meeting of the State Council that they should have operational plans that are intended to achieve the convertibility of the renminbi under a capital account. Although no details on the yuan convertibility was written in the meeting’s summary on the official website of the Central Government. Meanwhile the Chinese currency is already convertible in the current account, which is the broadest measure of trade and goods and services the capital account. The account covers portfolio investment and borrowing which is still closely monitored and managed by the government that is still worrying on abrupt capital flows.
So far no timetable is given on when the free tradable yuan will start, although the Central Bank has already given an outlined task in making the yuan convertible by 2015. Eventually China will lose its grip on the yuan that is supporting the country’s long term ambition to increase the global clout of the yuan to rival the euro and US dollar.