Investing.com - A flexible and fully-convertible Chinese yuan will lead to a broader range of currency pricing options and transform global capital markets, Reserve Bank of Australia Deputy Governor Philip Lowe said Wednesday.
Lowe made the comments in a speech on: "Some Implications of the Internationalisation of the Renminbi (RMB)."
"The internationalisation of the RMB - and China''s associated move towards a liberalised capital account and more flexible exchange rate regime - has the potential to create a seismic shift in the international monetary and financial landscape," Lowe said.
"Amongst other things, the opening up of China''s capital account and the process of RMB internationalisation may well elevate the RMB to international reserve currency status."
China is a top destination for Australian exports such as iron ore and payments in yuan are increasingly feasible as offshore trading hubs are authorized in countries like Singapore. China has also recently widened the trading band for the yuan at 2% on either side of the daily set central parity rate, from 1%, and has stated a longer-term goal of making the currency fully convertible on the capital account.