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Tom Hutchinson: China's Elite Currency Status Is Mixed Blessing


By    |   Wednesday, 02 December 2015 11:52 AM

The International Monetary Fund's inclusion of the Chinese yuan shows the country's growing influence on the world stage, but it is a mixed blessing, Tom Hutchinson, senior editor of the Newsmax newsletter "The High Income Factor," told Newsmax TV.

The IMF on Monday admitted China's yuan into its benchmark currency basket in a victory for Beijing's campaign for recognition as a global economic power. The IMF's executive board agreed to add the yuan, also known as the renminbi, to its Special Drawing Rights (SDR) basket alongside the dollar, euro, pound sterling and yen, in a move earlier backed by IMF chief Christine Lagarde and in-house experts.

The increased power is mostly at the expense of Europe and a more free-floating currency should be good for the U.S., he told “Newsmax Now.”

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"It means that they consider China to be a lead currency for the first time. It's a little late in coming," he said. "China's already the second largest economy in the world, but through certain reforms they made this list and now they're one of the world's elite currencies, reserve currencies and it's more reflective of their increased power," he said.

But there's no threat to the U.S. currency.

"As a matter of fact, ultimately it will be a good thing, but really there's space in the IMF. It's really at the expense of Europe. It's not a world power shift. It's a power shift in the world outside of the United States," he said.

"However, ultimately it will be good for our economy because China will have to toe the line a lot more and not manipulate its currency as much, which could be a big deal and lower the trade deficit going forward," he said.

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The IMF's inclusion of the Chinese yuan shows the country's growing influence on the world stage, but it is a mixed blessing, Tom Hutchinson, senior editor of the Newsmax newsletter "The High Income Factor," told Newsmax TV.
china, yuan, currency, imf
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2015-52-02
Wednesday, 02 December 2015 11:52 AM
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