Global RMB Reserves Will Increase By US $500 Billion In The Next Five Years.

A few years ago, as a global reserve currency, it was far from the renminbi. Today, the offshore RMB market is everywhere. The international bank has made it clear that the global RMB reserves will continue to expand. Some experts believe that the BRICSBank will use USD and RMB at the same time.

In February 26th, UBS said that more than 60 central banks held Renminbi in the currency reserve, and the amount of RMB held by the global central bank and sovereign wealth funds increased by US $500 billion in the next five years.

According to UBS's current data, the yuan accounts for about 0.1%~0.3% of global reserves, which should rise to 2% in the next five years.

"The dominant position of the US dollar can hardly be shaken in the short term and will gradually be replaced by a pluralistic monetary system.

The US dollar is unlikely to dominate in the future, and the renminbi will probably become one of the global reserve currencies around 2025.

Joyd, vice president and Secretary General of the Shanghai development research foundation, said in an interview with the first financial daily.

RMB moves towards the world

Previously, governor of the people's Bank of China

It said that some countries, including the developed countries, have begun to use the renminbi as the state's foreign exchange reserve currency in a "non public" way. At the same time, it is also reported that the European Central Bank has made preparations for RMB to be included in foreign exchange reserves since October last year.

In fact, in the less than half a year since the first time the renminbi has been out of Asia, the network of RMB clearing system has been spreading all over the world: across Asia, Europe, North America and Oceania, extending to Frankfurt, Seoul, Paris, Luxemburg, Toronto, Doha and Sydney.

Hu Xiaolian, vice governor of the people's Bank of China, disclosed that as of November 2014, the scale of the cross-border income and expenditure of the RMB was nearly 8 trillion yuan. The cross-border income and expenditure of the renminbi accounted for about 24% of the total cross-border income and expenditure of foreign currencies, and the proportion of RMB settlement in the import and export of goods trade was 15.7%, and 174 countries in China had cross-border RMB receipts and payments.

In addition, for the time being, 28 central banks have signed bilateral currency swap with China, with a total value of more than 3 trillion yuan.

The role of the "fire-fighting hero" has also been enhanced.

From the emerging market turmoil at the beginning of last year to the Russian crisis at the end of the year, the role of RMB currency swap can not be ignored.

It is worth mentioning that the International Monetary Fund (IMF) will consider whether to add renminbi to the SDR basket this year. Once the IMF puts the renminbi into the basket of currencies, the Central Bank of all the member states of IMF will automatically obtain RMB exposure by holding SDR.

Joyd said: "the RMB's entry into the basket has a strategic symbolic significance, which will promote the cross border use of RMB in the future and increase the representativeness of SDR.

The GDP represented by Basket Currencies has continued to decline rapidly since 2000 (down to 40% in 2012). If the renminbi can be added to the basket, the GDP represented by basket currencies will increase significantly, and it will also greatly reduce its downward trend.

However, when the IMF is still brewing, the Central Bank of the world has unconsciously moved ahead.

"You will see that central banks are increasing Renminbi positions," said MassimilianoCastelli, head of sovereign market strategy at UBS's asset management division. "They will gradually move to the onshore market because the offshore renminbi market is too small."

Despite the devaluation of the renminbi since 2015, the depreciation of China's currency has been interpreted as controllable and its interest in the renminbi has not diminished.

According to the data of the people's Bank of China, as of the end of December 2014, foreign institutions and individuals held RMB 4 trillion and 490 billion yuan in total assets, representing an increase of 1 trillion and 610 billion yuan compared with the end of 2013 in 2 trillion and 880 billion.

The four categories of assets (stocks, bonds, loans and deposits) Holdings increased.

In spite of the 2.5% depreciation of the renminbi in 2014, it did not hurt overseas investors' interest in Renminbi assets.

BRIC bank

Or use both US dollars at the same time.

In addition, with China's participation in multilateral institutions (such as BRIC banks) also surfaced, there is no lack of good news about the renminbi.

According to Russian media reports,

Sengupta, a senior researcher at the observer research foundation, said that the BRICs needed money that could be used at the same time as the US dollar, and that China's currency might become the currency of JayshreeSengupta.

When it comes to whether the establishment of a BRICs bank will accelerate the process of dollarization, Sengupta said: "especially when considering the currency swap agreement between Russia and China, the time to go dollarization will come.

At the same time, there must be a currency that is used at the same time as the US dollar. It is entirely possible for the renminbi to assume the role of this currency.

All members of the South Asian Association for regional cooperation and ASEAN are trading with China. "

The authorized capital of the BRIC bank is 100 billion US dollars, the initial subscribed capital is US $50 billion, the paid in capital is US $10 billion, and the paid capital is funded by 5 founding members in 7 years.

In addition to the BRIC bank, the BRICs provisional reserve arrangement (CRA) has also been concerned.

CRA reserves total $100 billion, of which China invested $41 billion, and Brazil, India and Russia invested $18 billion and South Africa $5 billion.

The establishment and start-up of CRA will provide emergency relief for BRICs, including other emerging market countries, which are facing liquidity crisis or debt crisis.

"If the scope of its coverage and the size of the reserve can be further increased, it will play a significant role in the current international financial framework, and may even become an independent monetary relief system independent of IMF."

Analysts say.

For the internationalization of the renminbi, Zhuang Jian, a senior economist at the Asian Development Bank's China Representative Office, told reporters that "the internationalization of RMB is still a long way to go. Multilateral institutions are only channels, and the key lies in China's domestic financial reform. Once the reform is in place, internationalization will come naturally."