Another major step towards making the Yuan fully convertible globally within five years.
Stephen S. Roach, former Chairman of Morgan Stanley Asia and the firm’s chief economist, is a senior fellow at Yale University’s Jackson Institute of Global Affairs and a senior lecturer at Yale’s School of Management wrote;
Draghi Reveals a Clever New Hedging Strategy
“It is worth noting that the ECB and People’s Bank of China (PBoC) have agreed to establish a bilateral currency swap line that would facilitate euro/yuan transactions. Swap agreements such as these are aimed at minimizing outside impact and
hedging US dollar exposure.
This is a trend that we expect to grow in time, but in the near term, there’s no question that the US debt problems were a primary motivation for these two central banks’ initiation of the 350 billion yuan/45 billion euro swap.”
Kathy Lien of BK Asset Management.