China’s renminbi is on course to become a world reserve currency after its inclusion in the International Monetary Fund’s Special Drawing Rights (SDR) basket.
The inclusion of the Chinese unit in the SDR regime has more than a symbolic meaning and has deep implications for Beijing’s efforts to promote the global use of the currency, the Hong Kong Economic Journal reports, citing Peter Wong, deputy chairman and chief executive of the Hongkong and Shanghai Banking Corp. Ltd.
The renminbi has become an international currency, not just a national currency, because of its SDR status, Wong said.
Meanwhile, renminbi savings in Hong Kong surged to 1 trillion yuan (US$156 billion) from 50 billion yuan in 2009 when the currency was adopted for trade settlements.
More renminbi-denominated products have been launched for offshore individual and corporate purposes.
Wong said Hong Kong should strive to become a financing hub for the multinational Asian Infrastructure Investment Bank established under China’s “One Belt, One Road” initiative to meet demand for fundraising and hedging of foreign exchange.
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