Market participants expect trade settlements in renminbi to continue to increase and new offshore markets to emerge, offering a broad range of products to attract foreign investors. They also foresee a progressive liberalisation of the capital account, including an increasing number of institutional investors operating in mainland China and, ultimately, a fully convertible renminbi.
Clearly, having become an important trading and payment currency, the renminbi is now taking the first steps towards establishing itself as an international investment currency. If it can do so successfully, it might one day become a leading reserve currency. Its internationalisation raises questions about the future shape of the world’s monetary system.