China's yuan not ready to be world currency: Central bank

BEIJING: The Chinese yuan has a long way to go before it is ready to be an international currency, a top central bank official said Tuesday, despite a recent push by Beijing to raise the yuan's world profile.

"We are cautious on the concept of the so-called internationalisation of the renminbi (yuan)," Guo Qingping, vice governor of the People's Bank of China, told reporters.

"Whether a currency becomes an international currency is not up to a specific country, but is up to the market."

China has been pushing aggressively for the wider use of the yuan abroad, signing a series of bilateral currency swap agreements in the past few months.

Central bank governor Zhou Xiaochuan earlier this year revealed China's apparent desire to challenge the supremacy of the US dollar, publishing an essay calling for the dollar's replacement as the global reserve currency.

Zhou had suggested the greenback be replaced by a basket of currencies.

Analysts however have warned it would likely take decades before the yuan assumes a truly global role and challenges the US dollar.

Guo echoed that opinion, suggesting the yuan lacked the maturity for a global role for a number of reasons.

"First, the economic competitiveness of the currency, and second, the financial market of the country in question have to be very powerful and developed and the currency itself has to be convertible," Guo said.

"Third, the environment in which the currency is used should be stable."

The yuan is currently not freely convertible but is instead pegged to a basket of currencies and strictly controlled by the nation's foreign exchange authorities.

"We believe that marrying the renminbi with these factors, the renminbi yuan is not qualified enough to be an international currency, so we are cautious on this concept," Guo said.