Skip to main content

Deutsche Bank: The Chinese Renminbi Will Be The World's Next Major Reserve Currency



According to a leading analyst the renminbi is expected to become a major reserve currency in the next decade, a move that could see the greenback's share of global reserve currencies fall from about 60% now, to 50% by 2020. 

Cloete notes that Berkeley economist Barry Eichengreen has said that the renminbi could account for 15% of global currency reserve holdings within ten years.
Cloete elaborates:
"Demand for RMB is bound to accelerate, given China's commitment to liberalize its capital and current account by the end of 2015.
Hardly a month goes by without the People's Bank of China further loosening the restrictions on onshore RMB trade settlements for foreign investors and customers. For instance, since August 2011 foreign businesses have been able to settle contracts in RMB in any province in China, a relaxation of the rules that would have been unimaginable even two years ago."

Chinese renminbi
Read more: http://www.businessinsider.com/deutsche-bank-the-renminibi-is-the-worlds-next-reserve-currency-2011-12


Chinese renminbi fast becoming the leading reserve currency  -Renminbi bloc 
According to Subramanian and Kessler, respectively a senior fellow and a research analyst of the Peterson Institute for International Economics (PIIE), the currencies of seven out of ten economies in the region are tracking the renminbi more closely than tracking the U.S. dollar. This seems evident, as China's manufacturing trade with East Asia has risen from a scanty 2% in 1991 to 22%. There are many reasons supporting the development of an RMB bloc. The renminbi's reserve currency posture has risen from 35th globally for transaction volumes in 2010 to 14th byAugust. The economies of Korea, Malaysia, Indonesia, Singapore and Thailand are already more tied to renminbi than dollars, signaling a growing trend in the region that favors the Chinese currency for cross-border trade.
A current white-paper by the SWIFT indicates that renminbi-denominated trade accounted for 10% of China's total foreign trade in July from close to zero just two years ago. 2012 is a milestone year for the RMB: it had a market share of 0.53 percent in August and has overtaken the Danish krone to become the 14th-highest global payment currency, SWIFT said. The Royal Bank of Scotland and HSBC are two banks quite bullish on the RMB. RBS predicts the RMB to become fully convertible by 2015. HSBC is a member of the 2012 London RMB initiative, set up by the City of London and has a US road show presentation to entice investors to pool funds into RMB bonds. HSBC also estimates the RMB to be fully convertible by the end of the decade.

Comments

Post a Comment

Popular posts from this blog

LIC Buys Double as Prices Dive - 10 Aug 2011

http://licreddy.com/Content/information/insurancenews_details.asp?NewsCode=4872 LIC Buys Double as Prices Dive 10-Aug-2011 Life Insurance Corp of India, the government's institution of choice to stabilise the stock market whenever it gets wobbly, has more than doubled stock purchases in the past three days as the global debt worry-triggered selloff made valuations attractive. LIC, the country's biggest investor with stakes in L&T, Axis Bank and Grasim, will raise its secondary market purchases this fiscal as IPOs dry up with promoters not keen to sell shares at lower valuations. "We have been buying in the past few days,'' said a LIC executive involved in decisionmaking. "With the market correcting and not many public issues coming up, we would be investing more in secondary market," said the person who did not want to be identified. LIC to Invest . 50k Cr More LIC, which had been buying stocks for an average of . 120 crore in the first four...
Post a Comment
Read more

Best IELTS and English language training institutions in Hyderabad

IELTS stands for International English Language Testing System. As the name implies it is basically an English test for testing the proficiency of the language in an individual.  Training for IELTS can be taken to pass the IELTS exam or to develop good english language skills. I am giving the training institute addresses for Hyderabad. The test system is jointly managed by the British Council,IDP education ltd and University of Cambridge ESOL Examinations and more than 1 million candidates are taking the exam all over the world. The test has two versions : 1. Academic 2. General training Academic  version is for people who plan to continue their higher education by enrolling in universities in countries like US,UK,Australia,Canada,New Zealand etc.The academic institutions in these countries consider the IELTS score as a criteria for the admission process. General training is mostly for immigration purposes in countries like Australia,New Zealand,Canada etc. It may ...
9 comments
Read more

Home loan or Car loan calculator

A good EMI calculator http://www.bankbazaar.com/home-loan-emi-calculator.html Tax benefits: Tax benefit is only on the interest paid on the loan taken. Prohibition of Usury in Various Religions Hinduism The earliest such record derives from the   Vedic   texts of Ancient India (2,000-1,400 BC) in which the "usurer" ( kusidin ) is mentioned several times and interpreted as any lender at interest.  More frequent and detailed references to interest payment are to be found in the later   Sutra   texts (700-100 BC), as well as the Buddhist   Jatakas   (600-400 BC).  It is during this latter period that the first sentiments of contempt for usury are expressed.  For example, Vasishtha, a well known Hindu law-maker of that time, made a special law which forbade the higher castes of   Brahmanas   (priests) and   Kshatriyas   (warriors) from being usurers or lenders at interest.  Also, in the   J...
3 comments
Read more