THE 19th century was dominated by the British Empire, the 20th century by the United States. We may now be entering the Asian century, dominated by a rising China and its currency. While the dollar’s status as the major reserve currency will not vanish overnight, we can no longer take it for granted. Sooner than we think, the dollar may be challenged by other currencies, most likely the Chinese renminbi.
The Roubini op-ed in full here, at the NYTimes. The argument isn’t quite as bold as it first appears, Roubini is careful to add nuance to his statements:At the moment, though, the renminbi is far from ready to achieve reserve currency status. China would first have to ease restrictions on money entering and leaving the country, make its currency fully convertible for such transactions, continue its domestic financial reforms and make its bond markets more liquid. It would take a long time for the renminbi to become a reserve currency, but it could happen. China’s currency swaps and RMB bonds in HK are steps along this path
See also, on RGE monitor, a rundown of issues on Yuan internationalisation.
Related links:
A roadmap for Yan Internationalization – Caijing.com
Will special drawing rights supplant the dollar? – Vox EU