This new article appearing in the East Asia Forum is a good read. It talks about what has happened with the Chinese renminbi in terms of it becoming a global reserve currency since its inclusion in the SDR currency basket. Below are a couple of excerpts.
-------------------------------------------------------------------------------------------------------------------" ‘Great powers’, says the Nobel-laureate economist Robert Mundell, ‘have great currencies’. So where is China’s?
In the years following the 2008 financial crisis, things seemed to be looking up for the renminbi. By the middle of 2015, almost 30 per cent of China’s trade was being settled in renminbi. Hong Kong banks were holding some 1 trillion RMB worth of yuan-denominated deposits and there was life in the dim sum bond market, with issuance running close to the equivalent of US$10 billion per month.
That year was also the year the International Monetary Fund (IMF) announced that the renminbi would become one of the currencies that underpin its own reserve asset, the special drawing right (SDR). Almost by definition, this step seemed to confer on the renminbi something like the status of a global reserve currency. So the renminbi seemed, to most observers, to be firmly on a path toward real international relevance.
Grounds for optimism have since proven to be decidedly fragile. . . .
Please click here to read the full article in East Asia Forum
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Added news note: Even as the article featured above questions when the renminbi will gain strength as a global currency, President Trump is still calling for a weaker US dollar. Rick Santelli (CNBC) and Dr. Judy Shelton discuss these recent comments by the President in this recent interview. Dr. Shelton offers her take on what the President was saying regarding the US dollar.
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