Bundesbank board member Andreas Dombret revealed on Monday that the bank has decided to include China’s yuan in its reserves, adding to a string of recent news reflecting the currency’s increasing prominence on the world stage.
“The notable development from the European point of view over the past few years has been the growing international role of the RMB in global financial markets,” Dombret was quoted by the Financial Times as saying Monday.
“The renminbi is used increasingly as part of central banks’ foreign-exchange reserves — for example, the ECB included the RMB but also other European central banks did so,” Dombret said during his speech at the Asian Financial Forum in Hong Kong.
Bundesbank board member Joachim Wuermeling added in email comments on Monday that “the decision to accept the yuan is part of a long-term diversification strategy and reflects the increased role of the Chinese currency in the global financial system.”
“In addition to the dollar and the yen, we have been investing in Australian dollars since 2013 and are looking to invest in other currencies,” he said.
HSBC chief executive Stuart Gulliver, speaking at the same conference in Hong Kong, said that the Belt and Road Initiative (BRI) will increase the usage of RMB even further.
China’s central bank announced new measures earlier this month to encourage cross-border yuan transactions in support of BRI projects.
When the repressive regime controlling China, the CCP, allows it, the Chinese currency will evaluate, as it is kept artifically low now.
When this happens, investments in the currency will revalue, and the common working people of China, will have a lot more bang for their buck, as well as having to work harder to remain competitive.
China’s ability to outsell competitors, by virtue of it repressed currency, making for ultra low cost goods, will be gone.
This will really show up the decades of repression in Communist China, as workers were bound in a moribund system of detention, surveillance and denial of simple liberties.
Low cost labour which the west gleefully exploited but those days are numbered.
Ottawa couldn’t have come up with this bonehead scheme all by itself. It surely was at the "request" of its southern neighbour which Canada will jump hoops to please while Nafta hangs in the balance. The objective of the invite only meeting is clear :to wrestle away the outcome of NK issue from its neighbours. Staunch "allies" Japan and SK must have felt very isolated in these preceedings while US and Canada discuss issue with Greece and Colombia.