An editorial in the Securities Times states that the economic crisis in the United States and Europe has brought a rare opportunity for internationalization of the Chinese RMB. In early September, Nigeria announced that it had a Memorandum of Understanding with the People’s Bank of China to convert about 5 to 10% of its foreign exchange reserves to Chinese RMB. China has already entered into agreements with Russia, South Korea, Mongolia, Myanmar, Malaysia and others regarding use of the RMB in settlement. The editorial states, “To internationalize the RMB is the only path for the rise of China. … From regional to global, this is the real path of internationalization.” "It not only expands the RMB’s influence but also reduces the exposure of Chinese foreign trade to the weak U.S. dollar." However, the editorial recognized that the RMB has a long way to go to become a true international currency, stating that the current situation is inadequate because China is the second largest economy and has the largest trade surplus and foreign reserves. “The current international environment has provided China with a historic opportunity to accelerate RMB internationalization.”
Source: Securities Times, September 9, 2011
http://epaper.stcn.com/paper/zqsb/html/2011-09/09/content_304984.htm