Yuan as global leading currency.

Byline: Farhat Asif

The RMB is the most positive performing currency globally and gained a strong position in global foreign exchange reserve currencies accumulating a 2.79 % global share in the last quarter of 2021. At the same time Chinese currency also rose to its six-year highs and gained 8 percent against major trading partners. The IMF reported the rising value of RBM in the global financial landscape, reflecting the direct result of tireless pushing of yuan internationalization and a rapidly growing economy. The economic institutions in China are expecting a further rise in the value of the currency profile in the coming weeks and months due to regional and global economic and political situations. The currency's strengthening also reflects a significant economic base that can face shocks, rise and shine again. Robust economic rise, especially exports, growth in trade surplus, steady development, and growth, including capital inflow helping to transform Chinese assets, are a few of the additional supporting factors for the strength of the Yuan.

The ongoing tensions between the West and Russia enabling financial chaos where the Euro and Dollar remain under pressure amid sanctions on trade with Russia is another passive factor transferring global attention towards the Chinese economy. RBM is experiencing growth and getting a stable place in the market to drive confidence in the international currency market. The Currency Composition of Official Foreign Exchange Reserves prepared the data released by the IMF, where the Chinese currency amassed $336.1 billion in the last quarter of 2021. By 2021, Yuan was the fifth largest currency, following the USD, Euro, Japanese Yen, and the Sterling pound. The proportion in the global foreign exchange reserves witnessed an upward trajectory from the third quarter of the same year, recorded at 2.66% of the world total. Along with the RBM reserves, China holds its 58.8 % reserves in dollars, but the Chinese believe the attraction of USD is declining by the time.

The economists further believe that the trend is irreversible and that the growing influence of the RMB is deeply linked with the growing economy and economic footprint of China. China uses multiple tools to push RMB in the international market, such as currency swaps, investments through BRI, and global trade. There is also an argument that the US-led and EU-supported US dollar-based international financial model is crumbling...