Friday, December 31, 2010
Internationalization of Renminbi-VII
“Can the renminbi become a major international currency in as little as a decade? Only time will tell. But U.S. history suggests that this schedule, while ambitious, is not impossible,” wrote by Barry Eichengreen, a professor of economics and political science at the University of California, Berkeley, publishing an interesting article in Japan Times (26 November 2009). By using historical evidence, Eichengreen compares with the dollars and sterling in 1914. It only took more than a decade that the American currency overtook the British sterling. Currently, the Chinese government has signed a renminbi swap agreement with Argentina, Belarus, Brazil, Hong Kong, Indonesia, South Korea, and Malaysia. This will allow the use of two countries’ currencies in bilateral trade transactions. Will renminbi be internationalized in a decade?