For the time being, the weight of the Renminbi as a reserve currency and as an international trade currency is very low. Can the RMB become a reserve and invoicing currency for large-scale trade, competing with the Dollar? Economists at Natixis analyze the mandatory features of an international reserve currency.
If the RMB does not become a reserve currency, it will be difficult for it to become a trade currency
The Renminbi is not convertible, is not backed by a large and liquid government bond market, and is not issued by a country (China) that has an external deficit and debt: the Renminbi therefore has none of the features of an international reserve currency, whereas the Dollar has all these features.
This will also limit the role of the RMB as an invoicing currency for trade: countries exporting to China in Renminbi would not be able to keep the money they earn from this trade, and the only possible use of this income would be to buy Chinese products.
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