Beijing is forging ahead in its efforts to internationalize the yuan, with sources saying this week that China may begin paying for crude oil with the local unit as early as this year.
Regulators have informally requested that financial institutions lay the groundwork for pricing the country’s crude imports in yuan, Reuters reported Thursday, citing three financial industry sources.
“Being the biggest buyer of oil, it’s only natural for China to push for the usage of yuan for payment settlement. This will also improve the yuan liquidity in the global market,” one of the people briefed on the matter by Chinese authorities was quoted as saying.
One source said the plan may start with purchases from Russia and Angola, though they were not able to offer further details. Russia and Angola are seen as natural allies in the quest to internationalize the yuan, both keen on dethroning the greenback.
Officials at several Chinese state oil company were unaware of the plans, according to the report, which sources said were still at an early stage.