The central bank yesterday denied it had said the yuan would be a key reserve currency, “as important as the US dollar by 2020,” in response to local media reports a day earlier.
Various local media cited a central bank report to the legislature’s Finance Committee during the committee members’ tour of the Central Engraving and Printing Plant on Wednesday that the yuan may share the position with the US dollar, or even replace the US dollar, as the major reserve currency in 2020.
“We never forecast the pace of development of the Chinese yuan’s internationalization,” the central bank said in a statement.
The bank said the Yuan-related information in the report was based on research by the Peterson Institute for International Economics, a private US think tank.
Meanwhile, various economists expect the yuan to surpass the Japanese yen and the British pound to become an important global currency within three years, as Beijing gears up to internationalize its currency.
China’s increasing economic power has forced Taiwan into joining the about 40 central banks that hold yuan-denominated assets, by including the yuan in its foreign-exchange reserves, the central bank’s report said.
In addition, China’s debt burden is relatively lower than other major economies, such as the US, Japan and the EU, with its balance of payments surplus larger than other economies.
In the report, the central bank reiterated its expectation that it will sign a currency swap agreement with its Chinese counterpart soon, which would serve as a preliminary and necessary step in making Taiwan an offshore yuan center.
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