Yuan floating depends on increased backflow: BOC

The key to floating the yuan globally lies in whether the central bank will allow a larger scale of the currency's backflow, a senior executive of the Bank of China Ltd said on Monday.

Wang Yongli, vice-president of China's fourth-largest commercial lender by market capitalization, said that use of the yuan worldwide has been obviously increasing, but that insufficient backflow has hampered its prospects as an international currency.

"The government should put the majority of yuan clearance on the mainland instead of offshore markets," he said.

Wang made the remarks in Beijing while attending a banking forum at the China Europe International Business School.

He added that an efficient clearance system is crucial for the internationalization process of the currency, and that the government should encourage inter-bank bookkeeping clearance instead of cash clearance, to further promote global usage of the currency.