Fully convertible yuan seen before 2020

Observers cite low inflation, yuan being near equilibrium value, stable surplus

[SINGAPORE] The Chinese currency is gathering steam on the way to full liberalisation, so much so that some economists reckon that full convertibility of the renminbi will take place well ahead of the official target year of 2020.

A window of opportunity for China to liberalise its capital account is open now that the renminbi is close to equilibrium value, inflation is low and the trade surplus is stabilising, said Qu Hongbin, HSBC's managing director and co-head of Asian Economics Research.

"As China's financial reforms speed up, full renminbi convertibility may come earlier than many expect - in the next two to three years," he said. "With the acceleration of the renminbi internationalisation,...

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