Zhou: Use More SDR; RMB Internationalization A Natural Process

The first part of this Chinese article linked below is a speech by Zhou Xiaochuan, here. The second part is some question and answer time with Zhou and Christine Lagarde.
Question 3

Lagarde: You just mentioned the SDR, to promote the inclusion of the RMB in the SDR regard, we have very good cooperation. I know that you and your team support broader use of SDR. Therefore, you also remove obstacles SDR users to enter the RMB market. Can you give us a brief idea of ​​promoting the use of SDR terms, such as SDR bonds?

Zhou Xiaochuan: We would like to see more widespread use of SDR, the People's Bank began to use SDR as the reporting currency of some statements. You mentioned that we are about to eliminate market barriers for the yuan into the SDR . On the one hand, the central bank tried to help improve the degree of freedom of the renminbi may be used in trade, investment and financial markets and other areas. On the other hand, we will be seen as a way to promote China comprehensively deepen reforms. This engine is the same role as an early reform of China's exchange rate regime of export-oriented economic development strategy played.

But we also see more widespread use of the RMB is a natural process, to respect the choice of market participants. If the dollar exchange rate stability, ample liquidity, no abnormal capital flows, when people prefer dollars. Otherwise, people would like to see diverse currencies to better manage risk, we are happy to see this gradual process of development.

Expanding the use of the yuan, the central bank has taken a number of policy measures, we can also do much more in terms of convertibility of the RMB, including further development of the foreign exchange market and reduce unnecessary regulatory measures. We are particularly concerned about the field of the yuan can not be freely used, ensure that the standards reached RMB freely available. We know that the use of the yuan in financial transactions is still not broad enough. Although the deal size is gradually rising, but it will not be a linear process, affected by the global market fluctuations, spiral. Of course, the yuan is expected to be able to long-term in the global financial market is more widely used. In addition, we also emphasize the importance of macroeconomic stability and low inflation. If we are to achieve a stable macroeconomic growth and low inflation, market participants will naturally choose to use more yuan.
EO: 周小川对话拉加德谈汇改:人民币更广泛的使用是一个自然而然的过程(附全文)

Shanghai Daily: China to continue promoting more flexible exchange rate: China's Central Bank Chief
MF last year approved the inclusion of the Chinese currency, RMB, into its Special Drawing Rights (SDR) basket as a fifth currency, along with the U.S. dollar, the euro, theJapanese yen and the British pound, marking a milestone in the RMB global march.

Zhou said that China is expecting the wider use of SDR, and is taking measures to promote freer use of RMB in trade, investment and financial markets, in an effort to reduce barriers for SDR users.

In regard to Chinese firms' high leverage ratio, Zhou said that China is working to improve the economy's resources allocation, and to ensure more resources flowing to the private sector, high-tech companies and the service sector.

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