Here's a bold prediction to feed Western worries that power is shifting inexorably to the East: China's yuan could overtake the U.S. dollar as the world's principal reserve currency as soon as next decade. Eugene Hoshiko / AP reports the yuan hit an all-time high in intraday trading on Tuesday, with traders predicting further gains for the rest of the year.
Beijing has been promoting the use of the yuan beyond its borders since 2009 to settle trade transactions. The resulting build-up of deposits in Hong Kong has spawned a thriving yuan bond market.
Internationalizing the yuan, also known as the renminbi, brings with it a host of financial and political benefits. Notably, it allows China to build up claims on the rest of the world in yuan rather than increasing exposure to foreign currencies, especially a dollar that it distrusts.
Beijing has been promoting the use of the yuan beyond its borders since 2009 to settle trade transactions. The resulting build-up of deposits in Hong Kong has spawned a thriving yuan bond market.
Internationalizing the yuan, also known as the renminbi, brings with it a host of financial and political benefits. Notably, it allows China to build up claims on the rest of the world in yuan rather than increasing exposure to foreign currencies, especially a dollar that it distrusts.
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