China’s yuan added to aviation settlements in boost to internationalisation
The International Air Transport Association is adding the yuan to the basket of currencies available for payments through its clearing house
Yuan settlements will be available from next month following the completion of a trial period, the association said in a statement issued on Wednesday, with domestic carriers China Southern Airlines and Xiamen Airlines as the first to test the system this month.
IATA’s clearing house platform already offers users seven currencies for payments: US dollars, euros, British pounds, Swiss francs, Singapore dollars, Australian dollars and yen. It provides settlement services to 581 airlines, including 33 Chinese and foreign airlines operating in China, and processed US$63.8 billion in transactions last year.
Describing IATA’s decision as “a positive development for the air transport industry in China”, Sun Yuquan, the chief financial officer of Air China, was quoted in the statement as saying the yuan’s inclusion could help avoid “costly and multiple conversions” and would speed up settlements and reduce currency exchange risks.
Allan von Mehren, a China economist at Danske Bank in Copenhagen, said the addition to IATA’s currency list was another sign that China had increased its determination to “speed up” the internationalisation of the yuan.