For all those arguing the U.S. isn’t on the decline, one of the biggest initial indicators has been our economic global influence. Say what you want about the dollar, it still beats out most other currencies. Most others, that is, but the Yuan.
This week, Nigeria seemed to confirm this by aiming to replace 10 percent of their reserves, historically held nearly completely with U.S. dollars, with Chinese Yuan instead. Bloomberg reports:
The nation plans to start holding the Chinese currency next quarter, predicting it will appreciate given the strength of China’s economy, central bank Governor Lamido Sanusi said today in an interview in Hong Kong, adding that the target was set more than a year ago. He said the yuan will “inevitably” become a reserve currency and that increased convertibility outside China had boosted its appeal.
While the move is clearly another sign of the lack of surety of the US dollar, Sanusi said that choosing the Yuan does not mean Nigeria thinks America is on the decline.
“Confidence in China doesn’t mean lack of confidence in America. Europe and America will continue to be important parts of the world. Having said that, it will be almost living in a dream world to ignore China. It’s the second- largest economy in the world and it’s well-managed.”