Wednesday, September 1, 2010

Roubini : China has no option but to accumulate dollar reserves

Nouriel Roubini :" In the short run, China has no option but to accumulate dollar reserves. Why? Because if they stop doing that, their currency would appreciate sharply while their exports are plunging. China cannot afford to let its currency appreciate any further, and to prevent the appreciation given their current and capital accounts they have to buy another $300 [billion] or $400 billion of reserves this year alone.

But I have seen a huge number of new initiatives in the last month after China expressed its worries that suggest they are pushing for the yuan to become an international currency and a reserve currency. . . .

They want to create a yuan zone in Asia. They are pushing for inter-Asian trade to be conducted in yuan. They are taking several steps that will lead their own currency to become an international currency. "
via The Washington post

No comments:

Related Posts Plugin for WordPress, Blogger...