Xinhua recently reported that the Bank of China made an announcement to the world of a new index to measure the internationalization of the Chinese currency (RMB). The new index is named Offshore RMB Index (ORI). This is the second index that the Bank of China has established. Last year, the Bank announced the Cross-Border RMB Index (CRI). The new ORI is designed to reflect the offshore level of RMB volume, RMB usage, and RMB utilization by financial tools. The ORI number grew nearly two times in the past two years, showing that the RMB volume overseas has been growing rapidly. Hong Kong is the most active RMB offshore market, followed by Southeast Asia and Europe. Africa, the Middle-East, and the Americas are still seeing very limited usage of the RMB. Compared to the offshore indexes of the U.S. Dollar, the Euro, the British Pound, and the Japanese Yen, RMB ORI showed a very small percentage in the overall offshore exchange market. The Bank of China is considered the “primary channel” controlling the RMB global circulation.
Source: Xinhua, March 11, 2014