Remember the renminbi billboard sighting in China back in March of 2015? Well, it has officially landed.
On Monday, October 3rd, 2016, a turning point for America begins: The beginning of the end for the global U.S. Dollar hegemony.
China’s yuan, or Renminbi (RMB), will officially join the International Monetary Fund (IMF)’s Special Drawing Rights (SDR) basket on Saturday, which indicates a step up in the international status of the currency.
- The inclusion is first and foremost recognition of the substantial reform efforts conducted by Chinese monetary authorities.
- “The RMB is already, for a number of years, very much an international currency.
- China has also taken additional measures to allow the inclusion of RMBinto the SDR,” said Jurgen Conrad, head of the Economics Unit at the Asian Development Bank in China.
- Alfred Schipke, the chief China representative of the IMF, thinks that the move’s significance isn’t limited only to the country.
- “[I think] the RMB joining the SDR will indeed be a milestone for China, but also for the international financial system. It, in effect, recognizes the progress that has been made on the reform side in China over the past couple of years,” said Schipke.
(TRUNEWS Beijing) – The development is a major step forward for China’s inclusion in the world financial system, though the short-term benefits might not be huge. That’s primarily because the SDR is still very limited in circulation, experts say.
“The amount of SDR in circulation is now a little bit more only than 200 billion U.S. dollars, which is very small compared to China’s international reserves of more than 3 trillion U.S. dollars,” said Conrad.
Schipke noted that the real issue is not just the RMB joining the SDR, but what really matters is what the Chinese government will do with it.
Full article: China’s Entrance Into SDR Basket Shifts Global Finance (TruNews)