Poland first in Europe to issue RMB debt in China

Poland has become the first European country to issue government debt into China’s mainland bond market, with a bond of 3 billion yuan ($452 million), marking a significant milestone for renminbi’s growing use internationally, which builds towards its reserve currency status.

China’s Dollar Peg to Wind Down

It seems likely that China’s central bank will reduce its grip on the U.S. dollar.

An editorial on the People’s Bank of China website recently made the case that China should tie the RMB to a basket of currencies rather than to the U.S. dollar. As it stands, China’s currency is pegged to a basket of currencies, but the dollar has appeared to dominate the RMB’s exchange value. China’s foreign exchange system may calculate a RMB exchange rate index against a basket of currencies that gives less weight to the dollar in order to reinforce market forces.

Chinese yuan likely to be added to IMF special basket of currencies

China hopes stamp of approval will improve yuan’s desirability among investors and undermine hegemony of US dollar as global reserve currency

China’s efforts to make the yuan an international currency on a par with the US dollar is to receive a fillip with the International Monetary Fund widely expected to add it to a special basket of global currencies.

Analysts say the shareholders in the Washington-based IMF will vote on Monday to include the yuan, also known as the renminbi, as the fifth member of its special drawing rights currency basket alongside the dollar, the Japanese yen, sterling and the euro.

Russia adds yuan as currency reserve

The Central Bank of Russia has included the Chinese yuan in its reserve currency basket, TASS reports. The move is expected to boost the yuan’s presence in the Russian financial market.

As of December 31, 2014, the latest data available, the US dollar was still dominating Russia’s forex basket at 44 percent. The second most-used foreign currency was the euro with 42 percent. The British pound made up 9.5 percent.

BRICS Bank, AIIB Pledge Partnership, Loans To Be Issued In Yuan

Over the first half of the year, we’ve built on several narratives that we believe are critical when it comes to understanding how the intersection of geopolitics and economics is set to shape the world going forward.

One of these narratives revolves around the extent to which three China-led ventures are set to supplant traditionally dominant supranational lenders on the way to embedding the yuan in international trade and investment.

The new ventures are the BRICS bank, the Asian Infrastructure Investment Bank, and the Silk Road Fund. We’ve discussed each of these at length and we’ve also shown that in one way or another, they all represent a shift away from the multilateral institutions that have dominated the post-war economic order. 

China looks to add yuan to IMF currency basket

China is in talks with the International Monetary Fund to include the yuan in the institution’s basket of reserve currencies, according to a central bank official.

“We are evaluating this and are actively in talks with the fund,” People’s Bank of China Deputy Governor Yi Gang said at a press conference in Beijing Thursday. “We hope it can fully consider the progress of yuan internationalization, allowing the yuan to be part of the SDR basket in the foreseeable future.”

Replace dollar with super currency: economist

The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.

“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.”

China Looking To Reposition Renminbi As Global Currency

China has already made its aim to establish the renminbi as a global currency, possibly even replacing the American dollar as the world’s reserve currency. Recent moves to ramp up the gradual liberalization of the renminbi, which is currently allowed to trade only within a narrow trading band, and other actions suggest that China may be preparing for a major push to establish its currency as a major global reserve currency.

…

Traditionally speaking, the American dollar has acted as this reserve currency. The dollar is the most widely used currency in the world, and most commodities, such as oil, are priced in dollars. Many countries keep huge dollar reserves on hand to facilitate trade. China, for example, is believed to have some 3.2 trillion dollars worth of reserves. Even the tiny city-state Singapore has over 250 billion dollars in reserves.