Why the yuan is about to become a global currency
The big message in Hu Jintao’s interview with the WSJ is that China is ready for the yuan to play a larger role in the global economy.
But the interview just caps what was already a big week for the Chinese currency.
For example, China said for the first time that it will low foreign investors to participate in yuan-denominated private equity vehicles.
On Tuesday the Bank of China said it would enable yuan trading for US investors.
Last Friday, China greenlighted the first foreign investments in its banking sector in years, as JPMorgan and Morgan Stanley won permits.
Meanwhile, the first-ever yuan-denominated hedge fund will be launched by Pharo Management.
Bottom line: The Hu interview made clear what China has been announcing for awhile. Expect a lot more.