Yuan Set to Become a “Reserve Currency?”



Comments (6)

  1. Susan Gates says:

    I am confused over the interchangeable Chinese currency of “Renminbi” and “Yuan.” Can you clarify?
    Thank you.

    [Reply]

    Tim Maverick Reply:

    Thanks for your question, Susan.

    The yuan and renminbi both refer to the Chinese currency. The renminbi is the official name for the currency, while the yuan is the name for a unit of the currency.

    Here in the U.S., we use Federal Reserve Notes as our currency, while the dollar is the unit of the currency. We don’t say you owe 10 Federal Reserve Notes, we say you owe 10 dollars. The Chinese don’t say they owe 10 renminbi, they say they owe 10 yuan.

    [Reply]

  2. Cheryl Stadler says:

    I am also confused regarding another piece of this puzzle. If the Yuan will be moving in a top position how can the average investor buy Yuan instead of dollars? We invest in companies, not currency. How does one invest in the Yuan? Thanks.

    [Reply]

    Tim Maverick Reply:

    Thanks for your interest, Cheryl. There is no easy way for Americans to own the yuan directly. However, there are three exchange traded products that do offer exposure to the yuan’s movements. They are: the Dreyfus Chinese Yuan Fund (CYB), the MarketVectors Chinese Renminbi/US Dollar ETN (CNY), and the CurrencyShares Chinese Renminbi Trust (FXCH).

    [Reply]

  3. Michael says:

    Did the IMF announce China as a world reserve currency on 10-20-15?

    [Reply]

    Tim Maverick Reply:

    The IMF has made no official announcement yet on the Yuan’s status. The next IMF meeting on the SDR review is scheduled for November. But as I said in my story, do not be surprised if a final decision is put off until 2016.

    [Reply]

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