- US Will Try to Set Roadblocks on Yuan’s Path to Reserve Currency Status
The US is unhappy with Beijing challenging it in regard to the reserve status of the dollar as China’s economy is growing and the yuan is becoming more attractive for other nations to hold, Robert Wenzel publisher of Economic Policy Journal.com told RT.
The IMF is debating whether to make China’s yuan a new reserve currency, according to the Financial Times. If Beijing is included in the Special Drawing Rights (SDR) basket it will have better access to capital, it will be easier to take out loans, and China’s political influence will be expended.
RT: The head of the IMF Christine Lagarde said recently that it’s only a matter of time before the yuan becomes a reserve currency. Will this happen in the near future?
Robert Wenzel: It makes sense for China or the IMF to do that. China is growing up, it is becoming a major economic force, the currency is becoming more and more attractive for other counties to hold. The only stumbling block is the US. They are not going to be happy with somebody else challenging them again with regard to the reserve status of the dollar, and the yuan moving into their position with regard to SDR status that just shows more strength with regard to the yuan in China. The US will probably throw some roadblocks in the air, but it is a close call whether China will be able to get in this time or not.