China still forging ahead with RMB internationalisation: HSBC chief
(10 June 2016 – China) Despite global uncertainty in the last year causing foreign investors to double guess investments into China, the process of internationalising the renminbi (RMB) has not been impacted, HSBC chief executive Stuart Gulliver said earlier this week.
Gulliver added that Chinese banks were set to rapidly increase their activity in international markets over the next couple of years.
Reuters said that the remarks were made as a presentation was being given on Beijing’s first yuan sovereign bond issue to be listed in London.
“From those contacts we have in the PBoC (People’s Bank of China) and the Ministry of Finance there is no pushback in the process of internationalisation of the renminbi,” Gulliver said. However, he added that he didn’t expect for the RMB to be freely floated in the near future.
“The future of the RMB is not necessarily floating in the way that sterling or the euro does,” he said.
“This will be a managed float.
Gulliver said the main lesson of the last year for the Chinese central bank was to communicate more clearly with markets.
“Part and parcel of (the yuan) becoming a broadly accepted currency is the central bank needs to communicate its actions,” he said.
”So just as we pore over Janet Yellen and the communications from Mark Carney and so on, I think they have realised they can’t just do things and not accompany it with very detailed comments.”
He said Chinese banks were “doing a lot” on acquisitions aimed at expanding into international markets where a number of big Western banks have withdrawn.
“Whether they displace the Western banks is hard to predict but I absolutely think they will play a more active role. It is now and over the next couple of years,” Gulliver said.
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