Report: China’s yuan to erode, not end, dollar’s dominance

  • Associated Press
  • Thursday, February 4, 2016 3:13pm
  • Business

WASHINGTON — A report from a federal watchdog predicts that China’s yuan will chip away at the U.S. dollar’s dominance over the next decade but is unlikely to supplant it as the world’s top currency.

The study issued Thursday by the U.S.-China Economic and Security Review Commission says the yuan will likely gain ground at the expense of the Japanese yen, euro and British pound and “may slightly erode” the dollar’s status.

Written by Cornell University economist Eswar Prasad, the report predicts that China will allow its tightly controlled financial system to “become largely open within the next three to five years.”

But it says Beijing must enact broader reforms before the yuan can join the dollar as a “safe haven” currency, sought after by investors in times of crisis.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.