Yuan’s moment?
The introduction of the yuan on the global stage will help China in its next stage of growth, and add to its global heft
China will soon have another chance to make a case for inclusion of its currency in the basket of currencies that determine the value of the special drawing rights issued by the International Monetary Fund.
The lender will meet at the end of November to decide.
Two conditions need to be fulfilled for this. First, the country that issues it should be an important player in the global economy. Second, it should be easy to use the currency in international transactions.
China definitely makes the grade on the first count but less so on the second. It has so far managed its currency through intervention and capital controls.
The introduction of the yuan on the global stage will not be as important as either the economic reforms that created the Chinese miracle or the country’s entry into the World Trade Organization. But it will help China in its next stage of growth. And add to its global heft.
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