The growing influence of the renminbi
It is the season when money matters and as Christmas draws near Guyanese will spend plenty of it. For those who opt to use cash, the dominant form of payment in Guyana, the attractive-looking new $5,000 bill will come in handy. Though it would not increase the bulge and load of the shopping basket, the new bill would lessen the bulge and load in people’s pockets. That lessening of the bulge might just be enough to throw predators off guard and keep alert shoppers safe. As attractive and useful as the new Guyanese currency is, it is not the story that is drawing attention near and afar. It is the increasing pressure that the more influential green-coloured currency, the US dollar, is facing to retain the title of undisputed king of global trade, global capital flows and global foreign exchange reserves. The pressure is coming from China and its allies in the group of countries referred to as the BRICS. The yuan is now the second most used currency in global trade, surpassing the yen and the euro. China has managed to achieve this status while keeping firm control over the management of its currency.
Many stories have been told about the BRICS, made up of Brazil, Russia, India, China and South Africa, but not of how its formation might have helped China to avert political and other pressure to liberalize its currency fully, rapidly and prematurely. The concept of BRICS emerged around the turn of the 21st century from a paper that was prepared by Goldman Sachs for the purpose of forecasting future global economic trends. Goldman Sachs is the name of a leading investment banking firm in the United States of America (USA) that provides a wide range of financial services to private and public customers across the …..To continue reading, login or subscribe now.