Yuan Currency Perspective – Will It Be A New Global Currency?
Will the yuan currency become a global currency, especially given the fact that in the past China has not allowed the yuan to be traded in the USA? Recent changes show that China has endorsed the fast pace of the current yuan growth, and is encouraging the global trading of the yuan in a way never seen before. Some Forex trading strategies have been changed due to the availability of this currency, and the lifting of certain restrictions that previously kept foreign investors from taking the yuan more seriously. Yuan currency is very strictly controlled by the government of China, but for the first time the Bank of China Ltd offers customers the ability to trade yuan, and this bank is government controlled.
Critics say that the dollar currency exchange rate against the yuan and RMB is unfairly kept low, because China controls the value of this currency and until now has not allowed the value of the currency to go up naturally like other currencies traded. Some experts predict that this will change, because China is one of the largest economic powers in the world and is making an effort to become a global player in the markets. The first sign of fewer restrictions on trading yuan currency was seen in Honk Kong last year. In the past Forex trading tips did not even discus this currency in detail, because it was not an option for traders outside of China with no business interests in this country.
The move to offer this currency to investors outside of China may result in a lower RMB exchange rate, and this currency is not a global currency yet because it is not fully convertible. The lifting of a few restrictions on trading yuan currency means that progress is being made towards this goal though. There are still limits on the amount of this currency that can be purchased by foreigners though, and experts warn that it is possible for China to change things up again. Unlike yen currency the yuan still has a ways to go before being considered a global currency.