Chance of renminbi overtaking greenback is ‘a long way off if it’s ever going to happen’
World Finance speaks to Mark Boleat, Policy Chairman at the City of London Corporation, about whether the Chinese yuan could overtake the greenback
World Finance: There has been talk that the renminbi could one day overtake the greenback as the international reserve currency; what do you think the likelihood of this happening is?
Mark Boleat: That’s a long way off if it’s ever going to happen. I think what business wants to see is alternatives.
The greenback is there, not because anybody’s passed a law; it’s there because of market reasons. It’s what people find easy to use; it’s got a lot of backing and support from America, obviously, a lot of the big financial institutions are in America. It’s not the only globally traded currency, of course: sterling, the euro, the yen, many other currencies.
We would expect the renminbi to be used increasingly, reflecting the size of the Chinese economy and growing trade with China. It’s not going to replace the dollar, but it’s going to be a very useful addition to the range of currencies that can be used.