As we all know, after the first 30 years of development, my country has long been out of poverty and backward situation, and has been firmly ranked as the world's second largest economy since 2010. At the same time, my country's industrial development is obvious to all. As the world's largest industrial country, its status as a world factory is also veritable.
Of course, with the continuous enhancement of my country's economic strength and comprehensive national strength, the international status of the RMB has gradually improved, and more and more countries are willing to consider RMB settlement in the process of trade with my country. Against this background, the process of internationalization of the RMB is becoming more and more smooth.
As for the current international payment market, the US dollar is undoubtedly the world's largest currency, and its proportion in the international payment system can reach nearly 40%. Of course, the reason why USD has such an important position is mainly due to the establishment of Bretton Woods system after World War II, and the value of USD and gold is directly linked to . The collapse of the Bretton Woods system did not reduce the US dollar's status. The US dollar was bound to oil, and its value was actually higher.
It is worth mentioning that with the rise of other countries, the hegemony of the United States and the US dollar has also been shaken. Although the US dollar still accounts for a relatively high proportion of today's international monetary payment system, its status as the US dollar has declined compared to the 1970s. In the international monetary payment system, the second place is the euro . EU can be said to be an international organization with very strong strength among many international organizations. The economies of the 27 member states of the EU are also very considerable, such as Germany, Italy, France and other countries are even more economic powers in the world.
Euro is a common currency circulating among EU member states. With the strong strength of the EU, the euro's position in the international currency payment system is naturally quite prominent. It is understood that the euro can account for 36.5% of the current international monetary payment system.
In addition to this, the third largest currency in the world of is the British pound . As we all know, as the pioneer of the industrial revolution , the United Kingdom is also an old developed country. At its peak of development, British colonies were distributed in almost all continents around the world. Although the two world wars in the last century severely damaged Britain's vitality and its international status and economic strength also declined, overall, today's Britain still has a significant influence in the world, especially the UK's financial industry, which is obvious to all in the world.
At the same time, as the UK's legal currency, the pound's international status should naturally not be underestimated with the support of the UK's strong strength. It is understood that the proportion of pounds in the current international monetary payment system can reach 6% , but there is a phenomenon that needs to be paid attention to, that is, the economic development of the UK in recent years may be relatively slow.
In the first half of 2022, the UK's GDP had fallen to sixth in the world, and by the impact of the US dollar, the value of the pound in the international monetary payment system has also declined. From the above analysis, we can see that the reason why the US dollar, euro and pound can become the top three currencies in the world is that the economic strength of the countries behind them is very strong. So in this case, what is the international status of the RMB?
According to the relevant report released by the Central Bank in September 2022, 's current RMB is already the fourth largest currency in the world, and since 2022, the payment ratio of RMB in the international trade settlement system has been continuously increasing. And in the statistics of the first quarter of this year, the reserve ratio of the RMB in the world's foreign exchange reserves has increased significantly, becoming the fifth largest global foreign exchange reserve currency.
Generally speaking, in the trade exchanges between countries, especially in the process of commodity trading , US dollars are generally used as a trading settlement tool. However, over the years, with the improvement of the international status of the RMB, when other countries have trade exchanges with my country, they will also consider RMB settlement.
For example, as early as 2020, the transaction between China Baosteel Group and Australia's Lito Group used RMB as a tool for cross-border settlement. Since then, the trade between the Vale company of Brazil and my country also used RMB as a settlement tool. In July this year, the iron ore exported by Australia's BHPBT to my country was finally settled in RMB.
Iron ore is an important raw material for international trade exchanges. The trade between the iron ore giants in Australia and Brazil and my country is settled in RMB, which all demonstrates the internationalization process of the RMB . In this context, it is only a matter of time to use RMB as settlement for international commodity transactions of coal, oil, natural gas .
Conclusion:
Overall, compared with previous years, the international status of the RMB has been significantly improved, but there is still a big gap compared to the US dollar, the euro and the pound. Of course, judging from the current development trend, China still has great development potential, both economic and comprehensive strength, and according to this situation, the international status of the RMB will be further improved in the future.
Today's topic: The RMB "overtakes" the yen for the first time in 6 years, becoming the fourth largest currency in the world! Who are the top 3?
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