The Yuan isn’t in the state to unseat the U.S dollar anytime in the future soon – but the Chinese currency is upsurging its prominence and international trade value.
Already enough has been illustrated about the U.S. dollars losing its dominance in the world currency, especially as it weakened in the past weeks.
Even after this, the analysts have rejected the idea, saying there is no rigid alternative to the greenback as of now.
On the contrary, the Chinese Yuan is all set to gain more prominence in the market, and its global usage has gone up owing to the nation’s accelerating economic influence.
On this, the Senior Investment Strategist at Vontobel Asset Management (Europe-based venture) Sven Schubert, said that there are numerous factors for the Yuan’s increasing dominance in the market, including- heated tech discussions and the cold war between both the nations, U.S and China and Beijing’s uplifting influence through its Belt and Road initiative.
Singapore-based bank DBS referred to the Chinese currency as another name, the renminbi and said that the severe tensions spilling over tech and financial aspects have “ignited a fresh push by Beijing to internationalize the RMB,” Source: CNBC.
Again highlighting the China’s strategies, Schubert said – “Thanks to China’s Belt and Road Initiative, its influence in the Eurasian region and Africa is rising as it ties many countries to its economic system, which paves the way for the yuan to find its way more and more into global trade contracts,” Source: CNBC.
Sharing his views on the Chinese currency, he stated- “Measured in terms of economic importance, the Chinese currency is currently underrepresented. This is likely to change over time,” Source: CNBC.
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