(Yicai Global) April 14 -- The Offshore Renminbi Index, which tracks the internationalization of the Chinese yuan, hit a record high at the end of last year thanks to China’s rapid recovery in cross-border trade, compiler Bank of China said yesterday.

The ORI, which monitors the proportion of yuan deposits in offshore accounts and the percentage of yuan in global foreign exchange reserves among other indicators, gained quarter by quarter in 2020 to reach 1.54 percent at the end of the year, a gain of 0.19 point from the end of 2019.

The redback was in active use overseas last year and the amount of yuan held abroad grew steadily, BOC said. Cross-border yuan settlements jumped 44 percent from 2019 to CNY28 trillion (USD4.3 trillion). And yuan deposits held by non-residents swelled 7.8 percent to reach CNY1.99 trillion at the end of the fourth quarter.

A large part of this was due to more support offered by overseas central banks, BOC said. The Hong Kong Monetary Authority, for example, appointed nine agencies as tier one liquidity providers in the Hong Kong offshore yuan market. While the Monetary Authority of Singapore injected CNY25 billion (USD3.8 billion) to hike banks’ credit intermediary capacity and overall liquidity in the Singaporean yuan market.

Yuan-denominated bonds were in much demand by foreign investors last year, the lender said. Yuan bonds held by non-residents surged 47 percent from 2019 to CNY3.3 trillion (USD505 billion). Yuan assets held in global reserves jumped 25 percent to USD267.5 billion, making up 2.25 percent of official reserve assets, up 0.32 point from 2019, it added.

Editor: Kim Taylor