yuan

An international payment specialist Travelex Global Business Payments unveiled a new service to allow its customers to trade in Chinese renminbi via its unique GEO Global Clearing Network. It will be the first non-bank institution to offer yuan transactions.

Now Travelex customers will be able to trade with high profile Chinese companies using the yuan currency to evade foreign exchange risks. For many businesses, the ability to price, settle and invoice in renminbi will encourage a faster, cheaper and more transparent supply chain.

According to European Council President Herman Van Rompuy, Chinese yuan will someday play a significant role as a global reserve currency while the U.S. dollar will remain an important currency.

"We live in a multi-polar world and a multi-currency world more and more, and that's the case for the rise of the euro as a reserve currency. The dollar stays as an important currency," Van Rompuy said during a visit to a Shanghai business school.

Deputy governor of Chinese central bank Yi Gang said in remarks published on Thursday that the yuan could potentially become a world reserve currency as the country gears up to boost its global presence.

"Why do global investors like to hold a certain currency and make investments in a market? They mainly consider its safety, returns and depth, and the liquidity of the market. China's market and the yuan have full potential," Yi said in an article published in the official Financial News.

Dominique Strauss-Kahn, a head of the International Monetary Fund, made comments this week on the world currency reform saying that Chinese yuan should be given a greater role within the restructured monetary system.

Speaking at the IMF’s headquarters Strauss-Kahn noted that adding emerging market countries' currencies such as the yuan to a basket of currencies that the IMF administers would benefit the global system and create more stability.

According to the forecast made by a Chinese governmental researcher China’s gross domestic product will grow by 9.8% this year with inflation most likely standing at around 3.7%.

Meantime, domestic demand will become a bigger driver of the Chinese economy this year and foreign trade growth will likely slow as compared to the previous year, says the Economic Forecasting Institute of the China Academy of Sciences.

The yuan started trading against the Russian ruble from yesterday as China allowed the transactions in a move to promote the currency’s use in global trade and finance. According to a statement released by the China Foreign Exchange Trade System, a subsidiary of the People’s Bank of China, the move will help “facilitate bilateral trade between China and Russia and help develop yuan trade settlements.”

During the upcoming event at Gyeongju, South Korea, the Group of 20 leaders will be considering the issue of a global "currency war," being pressed to come to a consensus as soon as possible. The truce in the currency war is needed to calm down foreign-exchange markets, still any certain decisions will be left to the leaders of the big industrial and developing countries, who meet in Seoul next month.

As it became known Monday, Euroclear Bank is to allow clients to settle transactions and deposit Eurobonds and Hong Kong domestic securities denominated in the Chinese Yuan Renminbi in Euroclear Bank.

The very first transactions in Renminbi are due to be settled on 27 September.

Dominique Strauss-Kahn, the head of the International Monetary Fund said this week that he would like to consider the inclusion of Chinese yuan or renminbi into the basket of currencies that make up the Fund’s Special Drawing Rights “the sooner the better”. Still, he said that the yuan’s value first needs to be freely determined by the market.

Dominique Strauss-Kahn told reporters in a news briefing that he believed there would be more pressure to include yuan among SDR currencies as China's economic clout grows.

On Monday after the announcement that China let the yuan rise to the highest since July 2005 stocks and commodities jumped while US Treasuries fell which eased tension between Beijing and Western economies.

The reports revealed that European stock futures increased by 2.2% and US stock futures were also near highs for the day. The move resulted in higher confidence on the part of investors in global recovery.

Thus, the yuan was increased to as high as 6.8015 against the dollar, or up 0.38%, the highest since it revaluation five years ago.

According to the 21st Century Business Herald China is testing the country's labor-intensive export sectors to see how much yuan appreciation firms can withstand. The Ministry of Commerce and the Ministry of Industry and Information Technology are conjointly performing “stress tests” to use the results as a reference for the government's future yuan policy.

China’s exports and imports last year increased at an unexpected rate which is considered by many economists as an evidence of the economy health and the necessity to make the yuan appreciate again.

The reports show that exports climbed by 17.7% against the year ago beating the economists’ expectations of 4.0% increase. Meantime, imports also jumped 55.9% which with usury exceeds the 31.0 percent increase markets had expected.

 The research institute of China's Ministry of Commerce published an essay that touched upon the issue of yuan appreciation and its adverse effects on the global economy. The essay notes that increasing the value of the Chinese currency would hurt rather than help world economic recovery.

 On Friday an official Chinese newspaper made a comment on the weakness of the US dollar saying it is "holding back" other countries' economic recovery, forcing them to choose between squeezed exports and inflation risks. The Chinese-language People's Daily said that the dollar creates problems for many nations across the globe.

 Luxembourg Prime Minister Jean-Claude Juncker urged China on Sunday to loosen its currency so as to let it appreciate gradually while the Europe in whole is not counting on immediate effects.

"I can't say that I'm more optimistic than I was before I came here," Juncker, who chairs the 16-nation Eurogroup of euro zone finance ministers, told a news conference in the eastern Chinese city of Nanjing.