Devalued Yuan Seeks Reserve Currency Status, But US Dollar Dominates. YaleGlobal. Will Hickey. August 13, 2015.
China is pushing for the renminbi to join the ranks of reserve currencies as designated by the International Monetary Fund. The IMF may delay such designation and gave a nod to China’s abrupt devaluation of the yuan, letting the unit respond to market forces. Reserve status for the yuan would be symbolic, a gesture acknowledging China’s weight in the global economy, argues Will Hickey. The United States, accounting for nearly 90 percent of all foreign-exchange transactions, would remain the currency of choice. With currencies tied to the dollar, the fortunes of many emerging economies rest with the U.S. Federal Reserve. Anticipation runs high for the US Federal Reserve to hike interest rates in mid-September. [Note: contains copyrighted material].
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