Chinese Ambassador to Sri Lanka, Xi Zhenghong, has called for greater use of the Renminbi (RMB) in trade settlements between China and Sri Lanka, emphasising its potential to strengthen bilateral economic ties and enhance financial stability.

He made these remarks at the 2025 RMB Internationalisation Forum, held in Colombo, and organised by the China Business Council in Sri Lanka, with the support of the Bank of China, Colombo Branch. The event brought together senior policymakers and financial experts, including Central Bank Governor Dr. Nandalal Weerasinghe, Minister of Labour and Deputy Minister of Finance Dr. Anil Jayantha Fernando, and Finance Ministry Secretary Dr. Harshana Suriyapperuma.

In his address, Ambassador Xi highlighted the evolution of the global monetary system from a dollar-centred framework toward one that is increasingly diversified. While acknowledging the US dollar’s historic role in maintaining global financial stability, he pointed out the structural imbalances and vulnerabilities that the dollar-centric system poses, particularly for developing economies.

“The dominance of a single currency creates a ‘tidal effect’ on the global economy,” Xi said, noting that sudden policy shifts in major economies can trigger exchange rate volatility and increased financing costs in developing countries.

He underscored China’s commitment to reforming and diversifying the international monetary system by promoting wider use of the RMB in global trade, reserves, and investment. The Ambassador cited that more than 80 countries have already incorporated the RMB into their foreign exchange reserves, while cross-border RMB transactions reached 35 trillion yuan in the first half of 2025, a 14% increase year-on-year.

For Sri Lanka, Xi emphasised that broader RMB use could help diversify foreign reserves, reduce exchange-rate risk, and lower transaction costs in bilateral trade. “At this critical period for Sri Lanka’s economic recovery and structural adjustment, expanding cooperation with the RMB will inject fresh momentum into trade facilitation, investment, and financial modernisation,” he noted.

He reaffirmed China’s readiness to work with Sri Lanka and other partners “on the principles of extensive consultation, joint contribution, and shared benefits,” to make the RMB a key element in a more balanced and inclusive global financial system.

Addressing the forum, Central Bank Governor Dr. Weerasinghe stated: “I remember we signed a currency swap agreement with China about 10 years ago. I signed it on behalf of the Central Bank. After that, we organised another event to promote the RMB facility in Sri Lanka. If we had the RMB facility at that time, we could have utilised the currency facility that existed. We have come a long way. When the RMB facility was introduced in 2010, it ranked as the 35th international currency in the world. By 2024, it reached the fourth position globally. During this time, the RMB has made remarkable progress. Strengthening the BRICS organisation will further support the use of local currencies in foreign transactions. We have a strong economic relationship between the two countries. China is Sri Lanka’s main import partner and the second-largest trading partner. Bilateral trade between the two countries, in 2024, amounted to USD 4.3 billion. On the other hand, the trade gap between the two nations was USD 1.1 billion in 2023. It has expanded from USD 2.8 billion to USD 4.1 billion in 2024, increasing in favour of China.”