06:57 GMT +319 July 2019
Listen Live
    Chinese banknotes

    Chinese Yuan May Become World Currency After IMF ‘Approval’

    © Sputnik / Artur Alexandrov
    Asia & Pacific
    Get short URL
    5325

    On Tuesday, the IMF stated that the Chinese yuan is "no longer undervalued." This would enable China to come closer to its goal: to establish the yuan as a world currency.

    The rise of the Chinese yuan as a world currency has no more obstacles as it is now considered "no longer undervalued" by the International Monetary Fund, DWN reported.

    China was frequently accused by a number of its trade partners of keeping the yuan artificially low to gain trade advantages and make its exports cheaper and, therefore, more attractive for  customers abroad.  However, the IMF concluded that over last few years the exchange rate had developed in such a way that it can be now officially recognized as fairly valued.

    According to an evaluation of the Bank for International Settlements, the real effective exchange rate of the yuan has risen in the last five years by 33 percent.

    The IMF declaration is a surprising blow to the dollar as the yuan now can become a likely part of the IMF's currency basket. With this move, China would be closer to its goal: to establish the yuan as a world currency and, thus, to break the dominance of the dollar in the long run.

    Related:

    Chinese Alibaba Boosting Investment in US Market
    Chinese Stocks Slump on Softer Data; Other Markets Gain on Energy Rally
    Tags:
    International Monetary Fund, yuan, currency, China
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik