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Bank of China said it will continue to expand the coverage of cross-border yuan settlement services, and that it aims to provide no less than 30 trillion yuan ($4.34 trillion) of settlement for domestic and foreign market entities throughout 2023.

The report to the 20th National Congress of the Communist Party of China released in December last year called for yuan's internationalization in an orderly manner.

Earlier this year, the Ministry of Commerce and the People's Bank of China (PBC) jointly issued a notice on expanding cross-border use of yuan, supporting banks to actively innovate cross-border yuan financial products, provide more convenient and efficient settlement and financing services, and better meet the diversified needs of foreign trade.

The bank said it will support the development of cross-border e-commerce and market procurement trade. The scale of cross-border yuan settlement under foreign trade in 2023 will be at least 350 billion yuan.

The bank will also promote the upstream use of yuan pricing settlement and financing by central enterprises, state-owned enterprises, bulk commodity trading and engineering contracting in Singapore, London and other global bulk commodity trading centers, and it will fully serve the yuan business of large energy companies.

The bank also plans to take advantage of its overseas institutions in 62 countries and regions, especially 13 overseas institutions designated by the PBC as local yuan clearing banks, to build a rich network of overseas institutions and clearing banks.

The yuan's internationalization has made steady progress in the recent years, amid the growing appeal of the yuan in global payments and settlements, and bullish views on the long-term development momentum of China's economy.

The latest data from global payment services provider Society for Worldwide Interbank Financial Telecommunication (SWIFT) showed that the yuan accounted for 2.37 percent of global payments in January, making it the fifth most active currency globally.

Meanwhile, in the volatile environment of the global foreign exchange market, the appeal of the yuan is expected to continue to grow.

The Central Bank of Iraq said in February that it plans to allow trade from China to be settled in yuan, Reuters reported. "It is the first time imports from China would be financed in yuan, as Iraqi imports from China previously used US dollars only," Mudhir Salih, the government's economic adviser, was quoted as saying.

According to data from the State Administration of Foreign Exchange, the proportion of yuan in cross-border use continues to increase. Yuan payments accounted for nearly 50 percent of China's cross-border payments in 2022, an increase of more than 20 percentage points from 2016.

Market watchers said that the cross-border yuan settlement volume related to the real economy has maintained rapid growth in recent years, and commodities and cross-border e-commerce have become new growth points.

Global Times