(Yicai) Oct. 30 -- The internationalization of the Chinese yuan continues to gather momentum, according to a new report from China’s central bank.

The yuan's internationalization index stood at 3.26 at the end of the first quarter, up 10.2 percent from a year earlier, the report by the People's Bank of China showed on Oct. 27. It reached 3.16 at the end of last year, an annual gain of 5.9 percent.

Global use of the Chinese currency has been growing since last year, and cross-border yuan services have enhanced support to the real economy, the yuan’s financing and currency functions have improved, and offshore yuan market transactions have become more active, the report said.

The redback accounted for 5.8 percent of international payments as of last month, up from 4.2 percent a year earlier, ranking second among global currencies, according to data from the Society for Worldwide Interbank Financial Telecommunication.

Cross-border payments and receipts made using the yuan surged 24 percent to CNY38.9 trillion (USD5.3 trillion) in the nine months ended Sept. 30, the report showed. The yuan’s share of the cross-border trade in goods reached 24 percent from 17 percent of the total settled in local and non-local currencies, the most in recent years.

Since last year, China has set up yuan clearing banks in Laos, Kazakhstan, Pakistan, and Brazil to upgrade the overseas clearing network. At the end of 2022, the balance of yuan deposits in major offshore markets was about CNY1.5 trillion (USD205 billion), a record high.

The yuan's share of foreign exchange trading rose to 7 percent from 4.3 percent over the last three years, with the currency climbing to the fifth spot from eighth, according to a 2022 survey by the Bank for International Settlements. 

China will advance the yuan's internationalization in an orderly manner and drive high-quality development and high-level opening-up, the PBOC report said. 

The measures to achieve these include optimizing the basic institutional arrangements for cross-border yuan, continuing to promote the institutional opening-up of the financial market, improving the yuan’s currency and financing functions, and creating a sound ecosystem for the yuan’s international use, while maintaining the bottom line of preventing systemic financial risks.

Editors: Xu Wei, Martin Kadiev