China's yuan may become Asia's settlement currency: report

SEOUL, May 5 (Yonhap) -- The Chinese currency may emerge as a settlement currency
in Asia, given Asian countries' large trade volume with the world's fastest
growing economy, a report said Tuesday.
"Trade volume between China and other Asian countries is huge. If the yuan is
used as a settlement currency in the region, the need to hold the U.S. dollar
will decrease for Asian countries," said Park Bun-soon, a senior economist at the
Samsung Economic Research Institute.
But Park forecast that it will take a considerable time for the Chinese currency
to gain traction as a global reserve currency to challenge the greenback.
"Although the overwhelming influence of the U.S. economy is falling, it won't be
easy for any currency to challenge the established reserve currency," he added.
Since the collapse of U.S investment bank Lehman Brothers Holdings Inc. in
mid-September sparked the global financial meltdown, some have raised questions
about the dollar's status as the key global currency.
In late March, China proposed that the International Monetary Fund's special
drawing rights become the world's reserve currency, replacing the dollar.
Park said although the yuan may not become the key currency, it could be
recognized as one of the major international currencies like the dollar and the
euro after 2030 when the size of the Chinese economy is expected to surpass that
of the U.S.
sooyeon@yna.co.kr
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