This week’s confab between China and the UK may have been as big a sea change as Saudi Arabia’s shift towards Russia, where both events spell an acceleration to the end of U.S. and dollar hegemony.
On Oct. 23, the UK announced in a joint statement with China that the Far Eastern currency is ready to be included in the IMF’s SDR basket, with this support coming less than a week after Britain issued the first ever Yuan denominated bond outside of China. And thus begins the true push towards ending the dollar as the sole global reserve currency.
Britain supports the inclusion of Chinese yuan, into the International Monetary Fund’s (IMF) SDR basket subject to meeting existing criteria in the IMF’s upcoming review,said a China-Britain joint declaration issued here Thursday.
Both sides urge members who have yet to ratify the 2010 quota and governance reforms todo so without delay to further enhance the voice of emerging markets and developingcountries, said the document.
The joint statement was signed during Chinese President Xi Jinping’s state visit to Britain, the first of its kind for a Chinese head of state in a decade. – China Daily
Yet perhaps in a sense of perfect timing, the IMF themselves jumped on the bandwagon today, and just a few months after reporting that China would not be ready for inclusion until well into 2016, representatives of the global bank announced that China was nearly ready to be a part of the SDR, and it appears now that this decision could be just weeks away, rather than months.
International Monetary Fund representatives have told China that the yuan is likely to join the fund’s basket of reserve currencies soon, according to Chinese officials with knowledge of the matter, a move that may make more countries comfortable using the unit or including it in their foreign-exchange holdings.
The IMF has given Chinese officials strong signals in meetings that the yuan is likely to win inclusion in the current review of the Special Drawing Rights, the fund’s unit of account, said three people who asked not to be identified because the talks were private. Chinese officials are so confident of winning approval that they have begun preparing statements to celebrate the decision, according to two people.
The Washington-based lender is reviewing the composition of the basket, with staff members due to present their recommendation to the fund’s executive board for a vote as soon as next month as part of a process scheduled for every five years. The board rejected including the currency following the last review, in 2010, concluding that the yuan didn’t meet the test of being “freely usable.” – Bloomberg
Use of the Yuan in global trade has skyrocketed since 2013, and is increasingly poaching commerce away from the dollar as nations from around the world shift more towards direct bi-lateral trade, and away from the long-standing tradition of using the dollar as a middle man. And since the last final item for the Yuan’s complete internationalization was achieved this week in Britain, it has removed all remaining excuses from tendering it in as a recognized reserve currency.
As OPEC appears to stand on the brink of ending the petro-dollar paradigm, and China is now ready to offer the world an alternative to the dollar and a single polar reserve currency, it should be no surprise that the U.S. is using war as a last ditch effort to hold onto their hegemony, with all nations who are tired of this aggressive foreign/monetary policy welcoming a new boss into the boardroom.