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Simultaneous with the plunge in the dollar is the rise of the yuan as an international currency.WSJ has been hitting on this story a lot lately, but the basic gist is that the government in Beijing has been making move after move to turn the yuan into a free currency, perhaps at a pace that’s been faster than many would have expected.
Now China’s regional counterparts want the country to do a lot more.
In an interview with China Daily, Lim Siang Chai, Malaysia’s deputy minister of finance, calls on the country to establish a single Asian currency.
A unified currency in Asia, where most countries are emerging economies that might easily attract hot money inflows from industrialized nations, could help diminish the risk of exchange rate fluctuations and help boost the region’s trade, said Lim in an exclusive interview with China Daily.
“Without China’s leadership, it’s hard for Asia to achieve the goal of having a solitary currency,” Lim said.
What’s perhaps most interesting is the explicit connection between the call on China and the hot money flows coming out of industrialized nations — a concept that’s tied to the sliding dollar and the expansionary Western cerntral banks.
All that being said, we wonder if anyone calling on the establishment of a single currency has taken a look at Europe recently.