China’s yuan has the potential to rival a weakening US dollar as a global currency if Beijing liberalises convertibility and access for foreigners, according to a senior Asian economist.
China wants more international use of its centrally controlled yuan, and the currency already works fluidly in cross-border purchase settlements, said Hoe Ee Khor, chief economist with the Singapore-based Asean+3 Macroeconomic Research Office.
“The US exceptionalism is over – the beginning of the end,” Khor told the Post on Thursday. “The US dollar is not the safe currency it used to be. The renminbi has always been held up as one of the possible alternatives, and it’s growing.”
But to push back against the dollar, China must “deepen” its financial markets so foreigners can better access yuan-denominated stocks, bonds and other assets, Khor said. New yuan-backed asset classes would also help, he added.
Convertibility remains another concern among investors outside the mainland, he added.
