Tuesday, April 14, 2015

Long read from Michael Pettis on AIIB

Will the AIIB one day matter? posted also in Naked Capitalism with lots of comments in both places:
"More importantly the RMB will not become a major reserve currency any time soon, and while its importance as a trading currency will probably continue to rise,..."
Dollar becoming a reserve currency seems somewhat unplanned as David Runciman explains here. Pettis also says "...I think the dollar will eventually lose its reserve status, not because it will be replaced by the RMB but rather because the US will eventually figure out that it entails too a high cost and that it is no longer willing to pay that cost."
For a different view, see "Winds of change in Asia" by Martin Khor.

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