Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Untitled Prezi

No description
by

Ran Zheng

on 23 June 2013

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Untitled Prezi

Q2: What needs to take place for the yuan to be listed right along with the US dollar and the euro as global currencies
US dollar(Bretton Woods currency system)

Euro(Integration of economics)

Yen(Japan’s economic boom)
Q1: Why it is important for the Chinese yuan to
become a major world currency?
Who Wants RMB?
Q3: Why is the Chinese government so
hesitant to open up the yuan to market forces to determine its value inside and outside of China?
Q4: What role do foreign Banks like HSBC and
electronic platforms like Thomson Reuters and ICAP play in helping the Yuan move closer to becoming a global currency?
Statistics
Q5: If you were to predict what the foreign exchange trading world will look like in 2014 when the bank for International Settlements issues its next triennial survey on foreign exchange, what would you predict?
Key observation of 2010 Triennial Central Bank Survey on Foreign Exchange Trading World.
Turnover in April 2010
Growth of global foreign exchange turnover: Global foreign exchange market turnover was 20% higher in April 2010 than in April 2007, with average daily turnover of $4.0 trillion compared with $3.3 trillion. 2014's expected turnover is 13 to 17% higher compared to 2010.
Lower transaction cost 10% world-trade; 1% settled in RMB

Lower borrowing cost

Better risk management
Avoid currency credit crunch

Better Foreign Direct Investment

Higher Reputation
Stable economic environmet
Inability to maintain control of the Chinese capital account and manage the currency

Suffering “Triffin Dilemma”
Strong economics power

Sophisticated financial system

Trustworthiness in RMB
An overview of how dollar, euro and yen became world currency
10% world-trade; 1% settled in RMB
Q2: What needs to take place for the yuan to be listed right along with the US dollar and the euro as global currencies
Turnover by currency: The currency composition of turnover has changed only slightly over the past three years, with the relative share of the main currencies diverging somewhat. The biggest increases were seen for the euro and yen, and the biggest decline for sterling. The most significant increases in emerging market currencies were seen for the Turkish lira, Chinese renminbi and Korean won, followed by the Brazilian real and Singapore dollar.
Geographical distribution of turnover: Foreign exchange market activity became more global and will continue. With cross-border transactions representing 65% of trading activity in April 2010. It is expected to be 70% by the beginning of 2014. while local transactions accounted for 35%, the lowest share ever.
Can Shanghai replace London as world major trading hub?
Turnover by currency pair : Turnover by currency pair in April 2010 showed no major changes in ranking from three years earlier, although absolute turnover in the major currency pairs tended to increase, with the exception of dollar/sterling transactions . USD/EUR remained by far the dominant pair, followed at some distance by USD/JPY.
Turnover by currency pair : Turnover by currency pair in April 2010 showed no major changes in ranking from three years earlier, although absolute turnover in the major currency pairs tended to increase, with the exception of dollar/sterling transactions . USD/EUR remained by far the dominant pair, followed at some distance by USD/JPY.
Geographical distribution of turnover: Foreign exchange market activity has become more global and will continue. With cross-border transactions representing 65% of trading activity in April 2010. It is expected to be 70% by the beginning of 2014. while local transactions accounted for 35%, the lowest share ever.
Can Shanghai replace London as world major trading hub?
The process of internationalization
remove all restrictions
Be able to invoice exports in RMB
Be able to hold the RMB and financial instruments
Be able to issue marketable instruments denominated in RMB
Should be included in the “currency basket” of other countries.
Predictions:

An HSBC forecast projected that by 2015, Yuan will become one of the three most used currencies in global trade, in league with the dollar and euro.

China has been making a concerted effort to establish itself as an international currency reserve. China already has agreements with Russia, Vietnam, Thailand, and Japan allowing trade to be settled in Yuan instead of dollars.
Steps
Effects
Current Role
2007: HSBC started issuance of Yuan
2010: ICAP PLC and Tompson Reuters
began to trade Yuan on their
electronic platforms.
The amount of Yuan in circulation
outside China steadily increased.
Increased transparency and traffic,
other banks started using this
platform.
Steps
Effects
Future role
Creating collaborative solutions
Broaden understanding in the
financial industry of the impact
of RMB internationalization.
Will improve automating RMB transactions
Help people spot new revenue/
investment opportunities.
Group Members:
Kun Du
Ran Zheng
Kaidan luo
Meng Jiang
Vinodh Vijaykuma
rAmanath Ali Mohammed

Introduction
History
For most of its early history, the RMB was pegged to the U.S. dollar at 2.46 yuan per USD
The official USD to RMB exchange rate declined from 1.50 yuan in 1980 to 8.62 yuan by 1994
8.27 yuan per USD from 1997 to 2005.
On March 8, 2013, the currency rose by as much as 0.19 percent to 6.1424
Background
Monetary policy

RMB revaluation pressure
Inflation issue
Employment issue

Step 1 2007 to 2009 Initiate an RMB-denominated bond market.

Step 2: 2009 to 2010 Begin cross-border trade settlement.

Step 3:2010 to 2012 Develop Hong Kong as an offshore RMB centre.

Step 4: 2012 and beyond: Develop other Asian centres (called regionalization) followed by centres beyond Asia
The plan for internationalization of the RMB
Remove all restrictions

Be able to invoice exports in RMB

Be able to hold the RMB and financial instruments

Be able to issue marketable instruments denominated in RMB

Should be included in the “currency basket” of other countries
The process of internationalization
Thank you
Step 1: 2007 to 2009 Initiated RMB-denominated bond market.

Step 2: 2009 to 2010 Began cross-border trade settlement.

Step 3: 2010 to 2012 Developed Hong Kong as an offshore RMB centre.

Step 4: 2012 and beyond: Develop other Asian centres (called regionalization) followed by centres beyond Asia
According to the world bank the USA, the Euro Area and Japan account for 28.5, 22.0 and 11.2 percent of world GDP respectively, compared to China at 4.6percent.
Full transcript