Saturday, May 16, 2009

China's yuan 'set to usurp US dollar' as world's reserve currency

Professor Nouriel Roubini, of New York University's Stern business school, believes that while such a major change is some way off, the Chinese government is laying the ground for the yuan's ascendance.

Roubini argues that China is better placed than the US to provide a reserve currency for the 21st century because it has a large current account surplus, focused government and few of the economic worries the US faces. He also predicts that Beijing will soon want to see the yuan included in the International Monetary Fund's special drawing rights "basket", as well as seeing it "used as a means of payment in bilateral trade."

[The Telegraph]

1 comment:

Anonymous said...

Brazil's president is in China to broaden ties between two of the world's largest developing economies, Brazil and China, and move to decrease their dependency on the US dollar. And it's his second visit to China in 12 months, since China has overtaken the US as Brazil's most important trading partner.

Speaking ahead of the visit he said he was looking to the trip to promote "a new economic order".

One item expected to come up in talks is a proposal for China and Brazil to conduct bilateral trade through each nation's currency, cutting out the US dollar as an intermediary.