Since
IMF
decided to include the
yuan in
the basket of
Special
Drawing Rights (SDR) from 2016, joining the
dollar, the
euro, the
pound and the
yen, the
internationalization process of
renminbi
has made a solid step forward and it will prompt China’s currency to strengthen
dramatically as demand for the renminbi rises in the future.
The renminbi will likely be
"stable" rather than depreciate against the greenback, while the US
dollar is due to become stronger against the backdrop of rates normalization in
the US. RMB might prove to be one of the few currencies that can still beat the
US dollar, said Becky Liu, Senior Rates Strategist at
Standard Chartered
Bank (HK) Ltd.
While some forecast that RMB will retain a
depreciating bias in 2016, Premier
Li Keqiang commented last
Friday that China can maintain yuan exchange rate “basically stable at a
reasonable and balanced standard,” adding there’s “no basis for a continued
depreciation.” The
Chinese
government has no intention and no policy to devalue its currency, as the
fluctuations in the currency market are a result of market forces, said
Li Yuanchao, China’s Vice
president, on the
World
Economic Forum’s annual meeting in Davos, Switzerland.
Rani Jarkas, Chairman
of
Cedrus Investments,
an investment pioneer with years of financial experience in Asia, said,
“Downward pressure on RMB is expected to ease. I expect RMB will remain one of
the few currencies that can outperform the US dollar in the years to come.”