Will the yuan make it to the IMF basket?
Perceptions and trust are perhaps the true designators of a reserve currency, not macroeconomic fundamentals or economic idealism.
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WITH the US Federal Reserve poised to hike interest rates soon amid a sea of devaluing currencies and quantitiative easing, the US dollar has became the defacto currency of choice among nations. The dollar accounts for nearly 90 per cent of all foreign-exchange transactions.
The International Monetary Fund has designated four currencies as reserve currencies available for stabilising monetary markets: the US dollar, the Japanese yen, the euro and the British pound. The IMF reviews the basket's composition every five years, and the next review is scheduled for November.
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