Canada News Agency

RMB or challenge the world "third currency"? reported on May 5 that Taiwan media recently said that mainland China is actively opening up foreign capital and domestic market. It is expected that the RMB exchange rate will stabilize or even rise this year, and the Asian countries are mulling an agreement to include the RMB as a financing currency in the crisis. To get rid of the status quo of excessive dependence on the US dollar, the pattern of international strong currencies is gradually taking shape.
According to Taiwan’s “Wang Bao” reported on April 29, 2019 may become the first year of internationalization of RMB assets.
According to the report, as more and more countries in the world regard the renminbi as an international reserve currency, the circulation of the renminbi in the international market will become more popular. According to estimates, the international position of the renminbi will increase in the global currency reserve in the next five to ten years.
Morgan Stanley economists said that as the mainland capital market continues to open up, the attractiveness of the renminbi as a global reserve currency will increase. In the next five to ten years, the proportion of the renminbi in global reserves may rise from less than 2% to 5%.
Coincidentally, as early as 2016, Simon Derek, head of global foreign exchange strategy at Bank of New York Mellon, once said that after the yuan joined the Special Drawing Rights (SDR), the future share of the yuan in global foreign exchange reserves is likely to reach about 5%.
This statement means that the renminbi will exceed the Canadian dollar and the Australian dollar. Currently, these two currencies account for about 2% of the global foreign exchange reserves and are close to the British pound (4.7%).
The renminbi is experiencing a rapid increase in global reserves. In contrast, the US dollar continues to fall: the US dollar's share of global foreign exchange reserves fell to 62.3% from 62.5% in the previous quarter, the sixth consecutive quarterly decline.
According to the report, dozens of countries and regions have already included RMB in foreign exchange reserves. In addition, a number of countries and regions have signed bilateral currency swap agreements with mainland China. In the long run, with the rise of the renminbi, the status of the US dollar “hegemony” is being shaken, and the process of internationalization of the renminbi is accelerating.
However, it is unrealistic for the renminbi to become the world's largest reserve currency in the short term, but surpassing the yen and the pound, becoming the third largest reserve currency after the euro is just around the corner.

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