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China PBOC's Yi sees faster progress on capital account reforms

People's Bank of China Deputy Governor Yi Gang delivers a speech during a program of seminars at the Annual Meetings of the IMF and the Worl
People's Bank of China Deputy Governor Yi Gang delivers a speech during a program of seminars at the Annual Meetings of the IMF and the Worl

By Lomi Kriel

PANAMA CITY (Reuters) - China will speed up reforms to open up its capital account now that People's Bank of China Governor Zhou Xiaochuan has been reappointed, a senior central bank official said on Sunday.

PBOC Deputy Governor Yi Gang said China was pushing ahead with reforms to markets and the capital account, which remain tightly controlled, amid market demand for freer access to the tightly managed yuan currency.

"We are making tremendous progress in the capital account convertibility," he told Reuters on the sidelines of Inter-American Development Bank meetings in Panama.

"The process will be sped up now (that the governor has been approved.)"

Zhou, who took the helm of the PBOC in 2002, was reappointed on Saturday. He has led the drive to liberalize interest rates and abolish the yuan's peg to the U.S. dollar, a step along the path to turning it into a global currency.

Yi said China was also close to finalizing new or renewed currency swap agreements with Brazil, Argentina and Britain. These promote use of the yuan in trade and investment.

"We are looking forward to signing a local currency swap with Brazil in the near future," he said.

"We are in the process of talking with Argentina and trying to renew that swap agreement. We are negotiating that swap agreement, and also it won't take too long."

China has bilateral currency swap agreements with countries including Singapore, Australia and Argentina, which was originally agreed upon in 2009 for a three-year period, allowing trade deals to be settled in local currencies.

(Reporting by Lomi Kriel; Writing by Krista Hughes; Editing by Maureen Bavdek)

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