While the dollar’s share of the central banks’ $12 trillion foreign exchange reserves has indeed declined since 1999, it is still nearly twice that of the euro, yen, pound, and yuan combined – the same as it was a decade ago. Its nearest competitor for global currency status, the euro, accounts for barely 20% of central bank reserves compared to the dollar’s 58%, followed by the Japanese yen at 5%. The much-touted Chinese yuan lags far behind at under 3% of foreign exchange reserves.
https://www.gzeromedia.com/by-ian-br...ive-the-dollar
What I love about this story is that it puts the lie to the anti-American fantasy that the Chinese currency is anywhere near unseating the dollar. The Euro is roughly 7x greater than the Yuan and nobody worries about it.he Chinese yuan, meanwhile, is not a viable alternative because of Beijing’s authoritarian and statist bent. In fact, Xi Jinping’s policy preferences – economic self-reliance, financial stability, common prosperity, and political control of the economy – run directly counter to his global-currency ambitions.
Despite its growing role in the global economy and long-standing desire to unseat the dollar, China lacks the investor protections, institutional quality, and capital market openness required to internationalize a yuan that is still not fully convertible overseas. Persistent currency and capital controls, an opaque banking system with too many non-performing loans, spotty contract enforcement, and often arbitrary and draconian regulations will all continue to undermine Beijing’s efforts to elevate the yuan.
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