MNI POLICY: Yuan Should Be No.2 In Belt & Road By 2035: Dai

     BEIJING (MNI) - China should further promote internationalization yuan and

drive for it to become the number two international currency among countries

participating in the Belt and Road initiative by 2035, said Dai Xiang Long,

former governor of the People's Bank of China in a speech Tuesday.

     China should promote the yuan's role in setting commodity prices and work

more closely with other countries' central banks on expanding its

convertibility, Dai said at a forum held by China Finance 40 Forum, a think tank

advising policy makers.

     The biggest obstacle to promoting the use of lending in yuan is the much

higher interest rates in the currency than available for the U.S. dollar, euro,

and Japanese yen, Dai said, calling for the PBOC to lower its benchmark rate

accordingly. China's inflation has been around 2%, and the non-performing loan

ratio has fallen under 2% in recent years, he noted.

     It is also important to promote direct trading in the yuan and the

currencies of Belt and Road countries in financial markets, as well as to expand

yuan offshore business.

     China should select key cities like Astana in Kazakhstan, Dubai and Abu

Dhabi to set up Chinese-funded financial enterprises or Sino-foreign joint

ventures to establish an offshore yuan business network, Dai added.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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