The Rise Of The Renminbi Will Surely Break The Monopoly Position Of The US Dollar.

At least 40 countries' central banks have already reserved renminbi, and more countries are preparing to join it. This trend is not only in emerging market countries, but also in developed countries. The former IMF official, the current Standard Chartered Bank Central Bank and Jukka Pihlman, the head of the sovereign wealth fund, said that the renminbi will become a reality before it can be freely convertible. International reserve currency 。

At present, the US dollar is still the world's largest reserve currency. According to IMF data, the US dollar accounted for 33% of the world's foreign reserves by the end of last year, which has been declining since 2000, when 55% of the world's reserve currency was US dollars.

But because the central bank's reserve currency allocation adjustment is closely watched by the foreign exchange market, many central banks refuse to disclose the details of the reserve currency. However, according to IMF data, the proportion of other currencies in foreign exchange reserves of emerging market countries has increased by 400% since 2003, while the proportion of developed countries increased by 200%. Most of this "other" currency refers to the renminbi.

The central bank's popularity may be mainly because China has given preferential conditions for foreign central banks and sovereign funds to encourage them to invest in Renminbi assets.

For example, foreign central banks get more quotas and longer time periods for RMB investment through QFII (qualified foreign institutional investors) mechanism. The South China Morning Post said that some of them could get 10 times the quotas of general foreign financial institutions, and more importantly, they were not subject to government capital controls.

Pihlman said, "the central bank and sovereignty. Wealth fund With preferential treatment, they can invest in a way that other institutions can't own. Although the renminbi is not fully convertible on the surface, it can actually be done. "

And because China's trade links with other countries are becoming increasingly close, central banks also have the desire to increase more Renminbi for trade.

However, for RMB International skeptics point out that as a reserve currency, the liquidity of the renminbi is not enough, and people will also suspect that the renminbi has the function of preserving value.

According to data from the global Interbank Financial Telecommunication Association (SWIFT), in December 2013, the market share of RMB accounted for 1.12% of the global payment currency, ranking eighth in the world, and fifteenth in the beginning of the year, compared with twentieth in January 2012.

Peter Zoellner, head of Bank of International Settlements (BIS), said last month that the US dollar could fall by as much as 10-15 percentage points in all major central bank reserve currencies in the next few years, and the status of China's renminbi will continue to rise.

Yves Mersch, an executive member of the European Central Bank (ECB), said earlier that the importance of China's renminbi in international trade and investment activities is increasing and may eventually challenge the US dollar.

Yifu Lin, the former world bank chief economist, also said that the dominant position of the US dollar is the root cause of the international financial and economic crisis.

Obviously, the rising status of RMB is also helpful to solve this problem.