Internationalisation of Yuan

Internationalisation of Yuan

This policy brief tracks policies being followed by China on internationalising its currency and reducing the need to depend on the US dollar. This follows the efforts of China to build a strong position in the global economy. It is still in a speculative stage whether the Chinese yuan would dominate the US dollar in the international financial market, or whether it will ultimately mature to attain reserve currency status, given that the amount of trade transactions in yuan has risen dramatically and that China has been easing capital controls gradually. If yuan fulfills the set of factors essential to attaining reserve currency status, it would increase the ability of China to borrow its own currency cheaply whenever required thereby reducing its dependence on the US dollar.

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