BEIJING: China will achieve a major breakthrough in full convertibility of the yuan over the next five years, Hu Xiaolian, said deputy governor of the People's Bank of China.
"Conditions for the yuan's convertibility under the capital account are improving and the fast development of yuan based cross-border trade settlements will help push the process forward," the China daily Saturday reported Hu as saying.
However, no detailed timetable has yet been set.
China is actively pushing the internationalization of its currency by allowing its companies to make overseas investments in yuan.
The central bank is also considering giving foreign companies the green light to make yuan investments in China.
However some economists warned that under current market conditions a more convertible yuan could lead to substantial appreciation of the currency and huge capital inflows.
"China needs to make its exchange rate regime more flexible to ward off those risks," said Chen Daofu, senior economist of the Financial Research Institute at the State Council's Development Research Center.
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