Thursday, January 10, 2019

Central banker asserts Chinese yuan will challenge dollar as primary reserve currency

On Jan. 10, Britain's chief central banker asserted during a forum that the Chinese Yuan will soon challenge the dollar as a primary reserve currency.

Speaking in a conference regarding Future global trends, Bank of England head Mark Carney stated that the days of the dollar being the singular reserve currency are diminishing, and that the Chinese yuan appears to be the best choice to rival dollar hegemony.


The US dollar may one day be rivaled by the Chinese national currency – the yuan – which is likely to become a major global reserve currency, according to the governor of the Bank of England (BoE), Mark Carney. 
“I think it is likely that we will ultimately have reserve currencies other than the US dollar,” the UK top financial official claimed during an online question-and-answer session carried out as part of the Bank of England’s Future Forum. 
According to Carney, the global financial system is currently lagging behind the evolution of the global economy, facing asymmetric concentrations of financial assets in advanced economies relative to economic activity. 
“As the world re-orders, this disconnect between the real and financial is likely to reduce, and in the process other reserve currencies may emerge. In the first instance, I would expect these will be existing national currencies, such as the renminbi,” he said. – Russia Today
Besides being added to the IMF's basket of currencies in recent years, China is suddenly becoming the go-to currency for large swaths of the global economy as the U.S. continues to sanction or use the dollar as an economic weapon on nations that reject their hegemony.

While it is unlikely that sovereign economies will call for a new 'Bretton Woods' to remove the dollar's status as the world's singular reserve currency, it instead appears that the dollar will continue to become isolated or even rejected more and more in exchange for bi-lateral trade, and thus it will eventually lose its place atop the global monetary system through a de facto takeover.

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