CHINA-ECONOMY: AIIB

 Hong Kong's South China Morning Post said on April 18, 2015, that the Chinese government will push for the yuan to become one of the denominations and settlement currencies for the China-led Asian Infrastructure Investment Bank (AIIB). Beijing will also call for the AIIB and the Silk Road Fund to establish special currency funds and issue yuan-denominated loans. Quoting sources, it said if the AIIB founding members cannot agree on a basket of currencies, China will allow the AIIB and Silk Road Fund to use the US dollar as a currency of settlement but will, however, encourage the use of the RMB (renminbi) as the organizations mature.


China's state-owned 'Outlook' magazine separately said in an article titled 'The Five Key Questions Facing the AIIB' that the AIIB has three options for its currency of settlement — the US dollar, the renminbi or an AIIB currency basket. It assessed that the US dollar would be the most cost-efficient and convenient and the yuan the most expensive and least convenient. The Outlook article was of the opinion that a currency basket would be the most attractive option since it is more resilient to market changes.
 






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