Debutante Chinese Renminbi has a special date with year 2015
Relentlessly appreciating Chinese Renminbi probably the most exciting currency
This amazing chart belongs to the Chinese Renminbi, China’s currency CNY. Since China announced the end of its Renminbi-peg to the US Dollar on 21 July 2005, it has embarked on a steady, unyielding appreciation. Over the last 8 years, the Renminbi gained 25%.
Question: Will the Renminbi continue to rally?
Experts predict Renminbi will be global currency by 2015
The International Monetary Fund is reviewing its special drawing rights (SDRs) basket, which uses four key international currencies to supplement member countries’ official reserves and bolster liquidity.
The deadline for completing that review is 2015. Based on where we see the G7 countries today, we believe there’s a very strong chance that China can get the onshore version of RMB, CNY, into that basket – a real boost to the currency on the world stage.
The equivalent of $2 trillion worth of trade transactions between China and the Middle East will be carried out using the renminbi within two years.
Some businesses, particularly those in countries whose currency was pegged against the Dollar, remained reluctant to transfer to the Renminbi, but anyone serious about doing business with China would have to consider it in the near future.
A Renminbi dominated future ala ‘Bretton Woods’
No one has come forth with a target exchange rate for the Renminbi so far. After all, such a tremendous accent by a currency does not happen often although some experts have compared current conditions to the US just before Bretton Woods. In addition, China often stated that it does not want a currency that is too strong. This stand dampens the mood somewhat. What is clear however few has come outright to say that the Renminbi will depreciate.
But this very interesting headline may be most telling: ‘Invest in the Chinese Yuan Before It Takes Over the Financial World‘.
Money Morning Chief Investment Strategist Keith Fitz-Gerald
When the Yuan truly steps onto the world’s stage in 2015, the game will change forever because there will be a fourth currency that has enough liquidity to absorb global capital flows. The sacred triumvirate of the U.S. Dollar, the Yen and the Euro will shatter.
Even though the Yuan has climbed 25% against the dollar over the past eight years, its rise is just beginning.