An overwhelming majority of institutional investors believe that China’s yuan is on the cusp of attaining reserve currency status in several countries, suggests recent research.
The study was conducted by mining company Tresor Gold and involved 100 investors from pension funds, private equity funds, family offices and sovereign wealth funds.
It found that 93% expect reserve currency status to be granted within five years – a move that would represent a significant shift in the global economy.
Almost a third (30%) of survey respondents expect the move to be “highly successful”, while just 2% believe the yuan will decline as a reserve currency.
The yuan still lags some way behind the dollar in terms of global FX reserves and is currently the fifth-largest currency, according to IMF data. However, the Tresor gold report contends that investors are confident that China will manage to persuade central bankers worldwide to acknowledge the growing role of the yuan.
“With Algeria, Argentina, Bahrain, Egypt, Indonesia, Iran, Saudi Arabia, and the United Arab Emirates applying for BRICS membership, and other nations formally expressing interest, it's clear that demand for the Yuan as a reserve currency is set to increase,” said Tresor Gold CEO Tony Lawson.
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