Economy 05-06-2018

The yuan on track to become a global currency

Beijing makes efforts to promote the yuan as a global currency. In 2015 the Chinese currency suffered a devaluation but now it gains momentum and increases its presence in world trade.

Three years ago the record presence of the Chinese currency was 2.8%, according reminds Bloomberg. In April the rate fell to 1.7% however now the currency is strengthening its positions.

"Of course this year the currency will be used more in international transactions the exchange rate will depend on the global financial markets and extraterritorial investors will generate a more important boost for local bonds" said financial expert Ji Tianhe. medium.

The Chinese initiative of the Silk Road and Belt (OBOR) will also contribute to the yuan's promotion according to financial analysts.

The trade and investment in the 'One belt one route' project would definitely increase foreign exchange flows between China and other countries participating in the project "Ben Yuen the senior representative of BOCHK Asset Management Ltd. Was quoted as saying by the media.

China has increased the yuan's participation in negotiating with its main trading partners particularly Iran and Russia - which are under US sanctions.

Thus, Russia and China have an investment fund denominated in yuan for a value exceeding 10 billion dollars.

The launch of oil futures in yuan is also a factor that should strengthen the Chinese currency. The third OPEC oil producer Iran sells its oil to China for yuan. The Islamic Republic rejected trade in dollars when the US threatened to re-apply sanctions.


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