Monday, November 16, 2015

Reserve Currency Status Won’t Stop Yuan’s Slide

In two weeks the IMF is expected to vote to add the yuan as an international reserve currency, but this move is not likely to lend much short-term support to the Chinese currency. It is an awkward time for a fund manager to bet on the yuan, with authorities in China probably obliged to pursue inflationary policies for several years to support an overheated stock market and a flagging economy, with weakness in both domestic and overseas demand. Indeed, if there is a collapse in the yuan, the timing of the reserve currency vote could become an embarrassment to the IMF. A roundup from Nyshka Chandran at CNBC:

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