Renminbi roadmap

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Published on:

2014-05-19
Category:

Other
by:

Banking and Securities (Sub-working Group) Working Group / Forum
Keywords:

Banking

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A combination of factors has driven the emergence of China as a global player on the world economic stage and the time is finally ripe for the Chinese currency, the renminbi 人民币 (RMB), to take its place among the leading currencies of the world.

While the global financial crisis of 2008 served as a clear tipping point for China's rise to prominence, stresses arising from continued fiscal, current account and debt woes in the US, the economic crisis at the Eurozone periphery and the long-term stagnation of Japan (coupled with its massive public sector debt build-up) have all served to highlight the woes of the world's traditional reserve currencies: the USD, EUR, JPY and GBP.

At the same time, China's rising global power in the early years of the 21st century has become increasingly evident, much as the US displaced the UK as the world's leading economic power in the early 20th century. The growth of a multipolar world has led to an international re-evaluation of the USD's role as the world's dominant reserve currency – paving the way for the possible adoption of the RMB as a global alternative.

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