Global Banking News-December 3, 2015--New Development Bank welcomes yuan's inclusion in IMF reserve currency
China, which has grown rapidly in recent decades to become the world's second-largest economy, has long sought to make the renminbi into a global reserve currency
, including the IMF designation.
However, they provide the IMF's approval that a currency has the qualities necessary to be an international reserve currency
The last time the IMF's reserve currency
basket was modified was in the year 2000, when the euro replaced France's franc and Germany's deutschmark.
Seignorage is the ability of a nation whose currency acts as the world's reserve currency
to extort financial rents from the rest of the world via running persistent trade deficits and devaluing its currency over time.
If the IMF votes the Chinese Yuan as a global reserve currency
, its value may outperform GCC currencies over time and consistently chip away the default position enjoyed by the US dollar as a global reserve currency
over the last few decades.
Another aspect is that currently the Chinese Yuan is not a fully convertible currency which limits its attraction as a reserve currency
for central banks.
Elhedery explained that the evolution for RMB as a currency followed a series of stages: transaction or trade-related, becoming an investment currency, and use of RMB as a reserve currency
For the foreseeable future, the dollar will be the world's largest reserve currency
holding and the most important currency for financial security.
NNA - A Kremlin aide said on Tuesday that if the United States were to impose sanctions on Russia over Ukraine, Moscow might be forced to drop the dollar as a reserve currency
and refuse to pay off any loans to U.
Dollar serving as the global reserve currency
and why it is about to change.
Popular discussions about the prospects of China's currency, the renminbi, range from the view that it is on the threshold of becoming the dominant global reserve currency
to the concern that rapid capital account opening poses serious risks for China.