Experts said whether the yuan will become a safe-haven currency

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Citi expert said whether the yuan will compete with the dollar in the near future

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In the near future, the Chinese yuan will not become a “safe haven”, an alternative to the dollar or US Treasury bonds. This was said by Ibrahim Rahbari, head of the currency analysis department at City Finance Corporation.

Rahbari pointed out that so-called safe haven assets (such as US dollars) usually have some characteristics. First, they typically offer the function of long-term accumulation of value. He said that in the short term, they also provide “shelter” during the “crisis period”.

“Obviously, the yuan is not suitable. Rahul said that you cannot easily enter the Chinese financial market easily, because many do not have enough liquidity …

Thus, despite the fact that the prospects for the Chinese economy and its financial markets are “generally favorable”, the yuan has a long way to go before it becomes the de facto alternative to the dollar and treasury bonds, a city analyst said .

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Steven Roach, an American economist and senior lecturer at the Yale School of Management, previously stated that the changing global economic landscape and the huge US budget deficit would cause the dollar to crash. According to expert forecasts, the US currency will fall by 35% against other major currencies. This will happen in a year or two.

Read: The world after COVID-19: what will happen to the dollar and which currencies can replace it

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