Deutsche Bank has become the first non-Chinese bank allowed to settle yuan transactions in Europe, a major step in Beijing’s ambitions to dislodge the supremacy of the US dollar.
China has made increasing the use of the yuan in international transactions a key priority of its latest five-year plan, including financing development projects abroad in its currency. US President Donald Trump’s “erratic” trade policies have added urgency to Beijing’s ambitions, the Financial Times argued, while historically low interest rates in China have also made the yuan more attractive for lenders.
However, the Chinese currency has a long way to go: The dollar continues to underpin the vast majority of international finance, with 64% of global debt denominated in the currency.
