Businesses see scope to borrow more yuan, according to a report published by Standard Chartered, which could support China’s push to globalise its currency.
The London-based bank’s survey of 300 corporate clients across developed and emerging markets found companies’ debt exposure lagged their revenue or cost exposures to the yuan and that many expected yuan financing to grow.
Almost a quarter of clients with existing yuan exposure said they expected to increase onshore or offshore yuan financing in the next three years. About 31% of all companies surveyed expected yuan financing would be steady or increase.
“Across sectors, RMB revenue exposure through sales, procurement and supply-chain activity exceeds RMB debt exposure,” said Standard Chartered in the report, using initials for renminbi, the yuan’s official name.
“This imbalance points to a structural underutilisation of RMB financing.” The survey was conducted by emailed invitation to clients between December and January.
China has sought for years to promote the yuan as a currency for world trade and financing and, from a low base, yuan-denominated debt markets are growing quickly.
Payment use has also been rising, though with a roughly 3% share of global payments versus 50% for the dollar, according to SWIFT, the yuan has a long way to go.
The Standard Chartered report noted demand for yuan usage varies across regions, with adoption largely driven by supply chains in Southeast Asia, while in the Middle East and parts of Africa usage is concentrated in energy trade and infrastructure.
Reuters
