Chinas calls for creation of the super-national currency specifically for the global foreign exchange reserves state not only the Chinese point of view that the dollar is going to depreciate in the long-term perspective but also that China is going to play a major role in the process of creation of the new global financial structure.
After the U.S. dollar fell at a fastest pace in its history against the euro last week, the Peoples Bank of China Governor Zhou Xiaochuan urged the creation of the «super-sovereign reserve currency». According to the Chinese monetary authorities the International Monetary Fund should create the currency that can protect the worlds foreign reserves from the dollars fluctuations.
The analysts believe that the China wants to fill a more dominating position on the next Group of 20 summit. The U. S. printing dollars to stimulate the domestic economy is definitely hurting the currency reserves of other countries and most notably Chinas as its the biggest holder of the U. S. Treasury notes. Reshaping the worlds financial structure would help China to protect their national interests; creation of the «super-currency» is one of the ways.
This week, Chinas central bank signed a currency swap agreement with Indonesia, which joined South Korea, Hong Kong, Malaysia and Belarus. Currency swap agreement allows foreign trade between the countries to be performed without involving the U.S. dollar as the intermediate currency.
USD/CNY rose from 6.8286 to 6.8316 as of 8:02 GMT today.
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