Singapore, Nov 12 (IANS) World Bank President Robert Zoellick has said in 15 years the Chinese yuan can become an alternative to US dollar as a global reserve currency, with China’s fast economic growth and efforts to internationalise the currency.
In an investment summit held on the sidelines of the 17th Asia-Pacific Economic Cooperation (APEC) summit here, Zoellick said Wednesday: “Though the Chinese currency now cannot be used easily overseas, but it will become more internationalised over the next 10 to 15 years,” Xinhua reported.

“This does not mean that the yuan will replace the US dollar, but it can provide an alternative, and you have the multiplicity of the exchange rates,” Zoellick said, noting the rise in the number of currency swap arrangements being inked between Beijing and governments around the world.

China signed the arrangements with its trading partners to avoid the risks posed by a volatile dollar.

Since mid-December 2008, Beijing has signed currency swap contracts worth 650 billion yuan (about $95 billion) with central banks in South Korea, Malaysia, Belarus, Indonesia and Argentina and Hong Kong.

These swap accords allow other overseas central banks to sell yuan to local importers who want to buy Chinese goods.

But the World Bank chief said the internationalisation of the yuan is still a long way off and as of today it is relatively secure to keep the dollar as the reserve currency.

Zoellick said to develop the multiplicity of the global reserve currency is part of the efforts to create a new global balance of growth in the post-crisis era as US consumers can no longer be the sole engine of global demand as in the past.

Zoellick said Americans should be reminded of the possibility of the dollar losing today’s predominance as a global reserve currency.

“My caution to the United States is that you have to fix your deficit and budget issues and don’t take it for granted this incredible blessing we earned through the hard work in the first 200 years or so,” he said.