Cross-border trade settled in yuan drops in July

BEIJING -- China saw fewer cross-border yuan transactions in July, despite the central government's encouragement for the yuan's international use, the Bank of China said on Wednesday.

A total of 306.7 billion yuan ($49.91 billion) worth of goods were settled in yuan in July, down 11.7 percent from June, according to BOC, China's largest yuan clearing bank. The amount of goods settled in yuan accounted for about 13.2 percent of China's total imports and exports, 3.3 percentage points lower than a month ago.

Still, the yuan remained the world's seventh most traded currency in July, contributing to about 1.57 percent of global payments, according to BOC.

On the cross-border investment front, however, yuan became more popular in the first seven months.

China's outbound direct investment settled in yuan reached 23.2 billion yuan from January to July, or 10 times of the amount seen in the same period of last year.

China is seeking to expand the use of yuan internationally, particularly in cross-border trade after it launched a pilot program to settle cross-border trade in yuan in 2009.

Meanwhile, China has also signed currency swap agreements with a score of countries to help facilitate bilateral trade and investment. Such swaps of national currencies bypass the US dollar.

BOC has so far opened more than 1,200 inter-bank?yuan clearing accounts and 1.7 million yuan accounts for corporate and individual clients overseas.

The bank almost doubled its yuan payment and clearing business from a year ago to 112 trillion yuan ($18.23 trillion) in the first half of this year, BOC data showed.

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