China Is Pushing The Use Of SDR To Triple The US Dollar And The Euro.

Historical experience shows that the international monetary system that relies heavily on single sovereign currencies is inherently unstable.

The international financial crisis in 2008 profoundly reflected the inherent defects of the current international monetary system over reliance on the US dollar.

RMB "basket" will drive China and even the global financial system reform.

After entering the SDR, RMB will gradually develop into one of the major currencies in the world.

The yuan currently accounts for less than 2% of the world's foreign exchange reserves, or about US $130 billion, but after the basket has been gradually increased, it will reach US $680 billion by 2025.

10% will become the third largest currency in the world after the US dollar and the euro.

The editorial said that this is a manifestation of national strength and a realistic demand.

China has become the largest trading partner and foreign investor in many countries, and the potential demand for RMB is enormous.

In addition, the "basket" will enhance the credibility of the renminbi, thereby increasing the allocation of overseas financial assets to China, and promoting cross-border capital inflows.

The people's Bank of China issued a notice on the 1 day, which welcomed the RMB being formally incorporated into the currency basket of the International Monetary Fund (IMF) special drawing rights (SDR).

Reported that, according to the decision adopted by IMF last year, from October 1st, the yuan will join the ranks of the US dollar, euro, yen and sterling, and will be included in the basket of SDR currencies.

The people's Bank of China said that the inclusion of RMB in the SDR is a milestone in the internationalization of the RMB. It is an affirmation of China's economic development and the achievements of the reform and opening up of the financial sector. It helps to enhance the representativeness, stability and appeal of SDR, and is also conducive to advancing the reform of the international monetary system.

China will take the RMB basket as an opportunity to further deepen financial reform and expand financial openness, making positive contributions to promoting global economic growth, maintaining global financial stability and improving global economic governance.

Reported that, because the RMB "basket", China is promoting the use of SDR.

At the end of August, the world bank's first SDR valuation bonds were issued in China, marking the official opening of the SDR bond market in China.

The report said that China regarded "entry basket" as an endorsement of China's growing influence in the global economy.

In this regard, Yi Gang, vice president of the people's Bank of China, said that China would join the SDR as an opportunity to continue to promote China's financial reform.

Yi Gang said, this means that China is approaching.

The location of the stage center.

RMB 1 gained the status of the global reserve currency.

It is believed that this landmark event will inject vitality into China's bond market, which is expected to generate up to US $1 trillion in the next five years.

Xie Dongming, economist at overseas Chinese Bank of Singapore, 1, said: "RMB" basket "has paved the way for China's capital [0.00%] market to strengthen interaction with other countries' capital markets.

The yuan will be the first to be affected.

The Chinese authorities are likely to maintain the stability of the RMB exchange rate in the next few weeks, because the sudden fluctuation of the exchange rate will damage the image of the renminbi. "

China has put forward a policy of gradually realizing the liberalization of RMB exchange rate, but most of the opinions in the market think that "it is difficult to achieve in accordance with the current rhythm".

Regarding the RMB being included in the basket of SDR currencies, the Japanese government looks at it calmly, saying that "it has no effect on Japan's economic and monetary policies".

Reported that China is still surviving in Japan, the United States and Europe and other developed countries do not have a lot of financial regulatory rules.

Governments worried about capital outflows and sharp fluctuations in exchange rates seem to continue to control the market.

Whether the renminbi can become a "genuine and genuine currency" depends on the extent to which the Chinese government can genuinely reform.

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What is worrying is that if the renminbi can be widely circulated as an international currency in the future, the status of the Japanese yen will decline.

If Southeast Asia and other places are also included in the RMB economic circle, it may hinder Japanese enterprises from entering the local market.