Will the Dollar soon share its role as the world’s reserve currency?
*MarketWatch, by Myra P. Saefong, July 17, 2015
”China has undertaken economic reforms aimed at persuading the IMF to include the yuan in the basket, which would accelerate its acceptance as a reserve currency. Read: China’s yuan has ‘Long March’ to reserve-currency status.
Or, China could be ‘lowballing’ their reserves to maintain confidence in its substantial U.S. dollar holdings, according to Mark O’Byrne, research director at GoldCore in Dublin.
But lifting the yuan’s potential as a global reserve currency is what’s behind China’s move to lift the shroud of mystery surrounding its hoard of gold.
‘China has ambitions to create a global reserve currency to challenge the hegemony of the U.S. dollar and fill the void created by the declining holdings by central banks of the euro,’ Norman said.
And the Chinese ‘clearly recognize gold’s role in providing credibility and status to what would be a new currency on the international stage,’ he said.
The IMF will be considering the inclusion of the yuan ‘under the special drawing rights in October — evidently the PBOC has more legwork to do if they want to be taken seriously,’ he said.
That could mean China will be adding a lot more gold to its reserves in the months to come.
O’Byrne said he wouldn’t be surprised if China starts to accumulate a minimum of 100 metric tons of gold a month.”
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