The largest trading nation in the world looks forward to reduce transaction cost in international trade, which is, for the most part, settled in US dollars at the moment. Renminbi has joined the ranks as one of the most-widely used currencies in international markets.
CNBC reports that the renminbi is positioned as the largest trade-finance currency in the world after the US dollar. The Chinese currency is expected to outperform the Japanese yen as the world’s 4th-most used global currency.
Rani Jarkas believes that the data released by the International Monetary Fund (IMF) showed that in 2014 the renminbi had calculated for 2.96 percent of worldwide trades, along with total direct investments which were valued at US$ 1.05 trillion.
In addition, $94 billion of official assets were already held in renminbi at the end of 2014, estimating for 1.1 percent of international foreign exchange reserves.
The IMF last year agreed to incorporate renminbi into its Special Drawing Rights (SDR) currency basket, as a clear representation of the Chinese reforms. Last week, the Monetary Authority of Singapore (MAS) declared that it will include renminbi investments as part of its official foreign reserves from June.
Rani Jarkas, an investment pioneer with several years of financial experience in Asia and Cedrus Investments’ Chairman, commented, “As China plays an increasingly important role on the international stage, RMB is becoming truly global and this is set to continue.”