Excerpt from: Forex News
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| August 25, 2010 | | Could yuan be the next world currency? | China certainly appears to be on its way to building the next de facto world currency. In spite of some relatively recent calls for a new global reserve currency, it appears that China could actually be setting things up for the ascendancy of the yuan.
Earlier this week, an arm of China's sovereign wealth fund held its first ever bond sale, resulting in raising 54 billion yuan -- an equivalent of about $7.94 billion. The idea is to shore up the interbank market in China so that Chinese banks remain solvent. Most of the buyers were state-controlled Chinese banks.
There are more plans for fundraising later this year. China has been making different moves in the last couple of years to move away from the U.S. dollar, including investing more in commodities, as well as in euro. Additionally, China has entered into bilateral currency swaps with other emerging market economies.
| Topic Tags: bond sale, China, Chinese banks, currency, currency swaps, economy, U.S. dollar, yuan | |
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