BEIJING, Oct 22 (Reuters) - Keeping the yuan relatively stable will be crucial for China's drive to gradually internationalise the currency, a former adviser to the People's Bank of China said in comments published on Friday.
Bolstering the yuan's usage in international trade remained the near-term focus in the ongoing programme to increase the yuan's global influence, said Li Yang, a former member of the central bank's monetary policy committee.
"China should not only encourage financial institutions to expand trade financing but also create a stable international environment for the internationalisation process by keeping the yuan's exchange rate relatively stable," Li said in an article published in the Chinese-language Studies of International Finance magazine.
Li's comments on the yuan
China should push for more bilateral currency swap deals with trade partners, taking advantage of its massive foreign exchange reserves, said Li, vice head of the Chinese Academy of Social Sciences, a top government think-tank.
Financial reforms to develop the yuan-denominated debt market would help boost its attractiveness and achieve the long-term goal of making it a global reserve currency, Li said.
"Up to now, the yuan has limited reserve functions and has yet to become an 'anchor' for other currencies," he added.
Since the global financial crisis in late 2008, China has launched a steady stream of policy initiatives along the path of making the yuan an internationally accepted currency for trade settlement to reduce reliance on the dollar.
China has signed currency swap deals with a handful of countries, including South Korea, Malaysia and Argentina, and this year said that it would allow all foreign trade partners to conduct their deals in yuan.
For a factbox detailing on China's programme to boost the yuan's international clout: [ID:nTOE67M077] (Reporting by Kevin Yao; Editing by Ken Wills)