China is near its goal of a fully convertible yuan, after nearly a decade of effort, the Chinese central bank said on Thursday.
"China has been steadily pushing forward yuan capital account convertibility since the currency became convertible under the current account in 1996," the central bank said in a report released on its website.
Easier convertibility means both domestic and foreign investors will have more freedom in investment and currency exchanges.
Currently, China's qualified domestic institutional investors and qualified foreign institutional investors have limited freedom of securities investment through a quota system.
The central bank report said China is also mulling QDII2, qualified domestic individual investors, which will allow more freedom for Chinese individuals to make cross-border investment.
The report added that the Shanghai-Hong Kong Stock Connect Program that allows mainland and Hong Kong investors to trade easily on the other's stock market, has been a major step toward yuan convertibility under the capital account. A similar program linking Hong Kong and Shenzhen is in the pipeline.
The central bank's push for yuan's convertibility is in line with the nation's broader efforts to internationalize the yuan, which is now the second most used currency in global trade, one of the top five world payment currencies, and the world's sixth foreign exchange currency.
Around 85 percent of the 40 subcategories in the capital account have become partially or fully convertible, according to data from the State Administration of Foreign Exchange.
