China 's World 's Elite Currency

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Chinese Ren Min Bi has become one of the world’s elite currency. On Monday, November 31, 2015, The International Monetary Fund has approved China 's yuan into its elite reserve currency. As this decision announced, it will impact China’s economy. This new policy will help pave the way for broader use of the renminbi in trade and finance, securing China’s standing as a global economic power, just like four other currencies — the US dollar, the European euro, the English pound and the Japanese yen. Yuan become international currency. What the impact to the other country, such as Indonesia as developing country? Nowadays, everyone knew that US Dollar is common currency that use for international currency, and usually use it for market…show more content…
Firstly, the dominance of the US dollar as an international currency to be more reduced. Chinese government believes that the positive effect will be felt by the country 's currency if the yuan becomes number one in the world, one of which is able to weaken the hegemony of the US dollar as global reserve currency. It also increases the importance of China in global financial markets. The impact could be felt at least in the near future, in the third quarter of 2016. In Indonesia, on the last few years, people can put their assets in bank by using US Dollar, but in the next few year, it cannot be denied if people can put Ren Min Bi as their assets, because Ren Min Bi exchange rate is cheaper and friendly than US Dollar. Secondly, the demand for renminbi asssets could be increased. The inclusion of the yuan also potentially provide a shift in asset demand for renminbi, it is predicted will take place in the short term in the capital market. However, the inclusion of the Ren Min Bi as a global reserve currency that could have a significant impact on profit credit. Moreover, Indonesia will be dependence on declining US dollar. The positive impact of reducing Indonesia 's dependence on the US dollar, if the bilateral swap effectively and cost of fund in market. Then it will give a tremendous impact of changes in economic conditions that exist in Indonesia later. So, Indonesia will be able
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