Here's why CNY internalisation will be a long-term process

Yuan's share in terms of wordwide payment stood at only 1.9% in August.

China has not lost sight of its aims to internationalise the Chinese yuan, and BMI Research believes that the government will continue to push for greater usage of its currency over the coming years.

"The establishment of stronger financial infrastructure, the setting up of more clearing centres, and rising outward investment will encourage greater adoption of the CNY. That said, the progress will be gradual as policymakers undertake currency reforms at a measured pace," said BMI Research.

Here's more from BMI:

China has been aiming to internationalise its currency over the past decade, and we believe that the government will continue to make efforts over the coming years to enable greater use of the Chinese yuan. We acknowledge that the government has made some progress in its CNY internationalisation ambitions thus far, with SWIFT data showing that the yuan was the fifth most used currency for global payments in August 2016, up from ninth position in 2013.

Moreover, the yuan's inclusion into the IMF's Special Drawing Rights (SDR) basket on October 1 was an acknowledgement of the currency reforms that China has undertaken over the past 10 years, but the process of yuan internationalisation is far from done.

In terms of worldwide payments, the yuan's share stood at only 1.9% in August, despite China accounting for 10% of global trade in 2015 (versus the USD, which held a 42.5% share, but accounted for 12% of worldwide trade).

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