China will allow foreign central banks to trade all onshore currency products, including spots, forwards, swaps and options, the PBOC said in a statement Friday, as authorities seek the yuan’s inclusion in the worldwide Monetary Fund’s basket of reserves in a review later this month. “The bank, a long-standing advocate of the internationalization of the renminbi, is the only overseas bank that trades all the renminbi’s existing available currency pairs”.
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Meanwhile, about 51 percent of the respondents in the latest DBS survey believe the yuan will continue to lose ground against the USA dollar in the next 12 months, with 44 percent expecting loss to be between 2 and 5 percent, the DBS RMB Index showed. Development of direct trading between RMB and CHF will contribute to the formation of direct exchange rate between the two currencies.
China’s yuan was almost unchanged against the dollar on Wednesday, after the central bank set a nearly flat midpoint rate.
First it wants the Yuan to become part of the IMF’s Special Drawing Right (SDR), which would effectively give it reserve currency status, and a decision on this is anticipated shortly.
But many Western analysts remain sceptical regarding the true levels of the Chinese monthly purchases – indeed of the the real total level of the country’s gold reserves suggesting that they both may be far larger than is being reported.
Ms. Yeung said the increased internationalization of the Chinese currency would “provide a plethora of new opportunities for foreign banks and Chinese banks across a range of areas”. “Through manipulation of the yuan, the Chinese government has been able to tip the trade balance in their direction by imposing a de facto tariff on all imported goods”.
Titled “The yuan already displaced Japan and puts on the pressure”, the report said that “China’s currency has bumped the Japanese yen from fourth to fifth place in the classification chart of currencies used for worldwide payments”. That was just a few eight months after the yuan hopscotched the Australian and Canadian dollars to move from seventh to fifth in early 2015. That’s going to be the sun setting on the American century.
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Trump sharply criticized Obama for striking a deal with Xi given China’s possible links with major hackings of the US government.
