The Internationalization Of Chinese Currency

International trading of currency within different countries has some of the same terms with the same meaning. None the less, although each country has a monetary system, problems can still arise whenever the exchange of capital is taking place remotely. Brigham

China, the largest growing market in the world, currently has a policy regarding monetary regulation that allows the Yuan to “float”. This has seen the Yuan appreciate by approximately 24% over the past few years. Today, the exchange rate between the Chinese Yuan and the American Dollar is approximately 6.3 Yuan to 1 Dollar. Some argue that China should revalue the Yuan again the dollar, establishing a more fixed exchange rate. Others believe that current should allow

A society based on trade was established as early as 4000 B.C.E. (Hunt 6). However, the end of the Cold War marked the beginning of a new stage, an economy fully supported by globalization (Gilpin 10-12). This new beginning for the economy made the international markets the central focus of the economy. Since the gold standard had crushed, the US dollar became the official exchange standard and also the most used currency in the world. Currently, its status of international currency remains the same, but the international market has changed so much that there are factors that leave its future uncertain. The role of the US dollar as an international currency is at risk because of the

Therefore, various political leaders from non-issue international currencies country, such as China and Russia suggest that using a super-sovereign reserve currency instead of US dollars, euro and so on as the reserve currency. As shown in an article wrote by Zhou Xiaochuan, governor of the PBC ( the People’s Bank of China), a super- sovereign reserve currency should be created as the desirable reserve currency instead of US dollar. He said that “create an international reserve currency such as the SDR (Special Drawing Right) which is isolated from individual countries, and also be able to remain stable in the long run. This can help to removing the inherent deficiencies caused by using credit-based national currencies” .

The objective of this paper is to give a clearer picture to how the U.S dollar became the world 's most dominant reserve currency . Several countries use it as their official currency, and many others use it as the de facto currency . Moreover, American dollar is the primary reserve currency, which is used as the standard unit in international market for commodities such as gold and petroleum. However, the dollar has been declining over the last three decades; in fact it has lost almost half its value against other major currencies. The purpose of this research is to bring clarity for the following questions: How, when and why the dollar became the world’s reserve currency? Benefits of having the largest world reserve currency? Comparing the dollar with the pound and the up and rising Chinese Renminbi (RMB), and predictions for the future.

This paper indicates the issue of full convertibility for the Chinese currency, Renminbi(RMB), and its impact on the economy of China. It does not only point out the sequencing of Renminbi’s full convertibility, expounding the detailed concepts procedure of currency convertibility (current account convertibility and capital/financial account convertibility and full convertibility) but also focus on the necessity and challenges will bring to China based on this subject. A review of historical process toward the full convertibility of Renminbi will be provided. There are still various restrictions on capital account convertibility in China. It still takes some

Further, because of the enormous size of the U.S. economy, the U.S. dollar is the currency most used in international foreign exchange transactions, making the U.S. dollar the official foreign exchange reserve currency for more than half the countries in the world. Linda Goldberg, Is the International Role of the Dollar Changing? Current Issues In Economics and Finance, Vol. 16:1 (Fed. Reserve Bank of NY, Jan. 2010). This results in U.S. banks and foreign banks using U.S. dollars to stabilize these foreign economies and the international market place. When U.S. companies invest in outside countries, the investment helps the foreign country investors (i.e., domestic stockholders) to access the international market place to support their local, foreign economy. Foreign investors pull in other outside investment as the foreign economy grows. "Furthermore, a successful investment in a poor country will

The purpose for this paper is to explain what is meant in terms of a world reserve currency in the financial world giving details of how the U.S. dollar became the prominent title owner. The paper will proceed to give a detailed understanding of the interworking of the world reserve currency with international trade and its importance to the U.S. economy. Also, the paper will mention the looming threats to dethrone the “all mighty dollar” of its world reserve currency status with far reaching ramifications to the American economy if that were to take place. In closing there will be a short summary of the important points discussed throughout the paper.

The monetary policies of USA and China is analyzed here from the perspective of their implementing bodies, their choice of instruments, and their means of setting their interest rates. The analysis reveals that there are immense differences between the two countries resulting from the nature and degree of influence from their respective domestic political systems. The paper

INTRODUCTION. As countries battle high inflation and decreasing GDP, they have looked for solutions to these serious issues. One such solution has experienced great success, dollarization. The success of this practice could lead to global dollarization, creating a global currency. This paper will explain why many countries have adopted the U.S. dollar as their national currency and explain why the dollar might become the single global currency, focusing on the similarities between Menger’s theory of the origin of money and dollarization.

Over the last 30 years, China has been one of the leading emerging economies in the world. In this time China has experienced a growth in capital inflows into the country which has led to having to make choices between exchange rate stability and monetary independence. The Chinese yuan is the official currency of the Peoples Republic of China. It is an emerging currency that some think will vie for an alternative to the US dollar or the Euro as a leading currency in the international foreign exchange markets. The United States is the leading economy in the world and has been for decades. The US dollar is the most used currency in the world. Several countries besides the United States use it as their official or de facto currency.

Every global fiscal and money related framework needs to depend on at least one universal currency so as to permit financial specialists to interface in the global economy by utilizing such coinage as a method of payment, a unit of record or a store of significant worth. At the point when these global currencies are additionally local ones, the supply of global liquidity comes from at least one "center nations." Furthermore, when the center governments work as a restraining infrastructure or semi-imposing business model, after some time they tend to exploit other countries ' high reliance on their local cash. By misusing this

In the 11 years, the international economic situation has undergone great changes; pegging the RMB exchange rate formation mechanism type has become increasingly unsuited to China 's economic reform and development requirements. It is demonstrated by the defects are:

With China's deepening Opening Up and economic restructure adjustment and the continuous appreciation of RMB in recent years, the

The US and Europe felt that the RMB was undervalued for several reasons. One reason is that China’s exports had dramatically increased, growing 30% from 2004 to 2005, making China the third largest exporter in the world and accounting for