U.S. Treasury Secretary Biden believes that the idea of the Chinese yuan becoming a major global reserve currency is a fallacy, as it cannot be freely traded.
Biden made the above statement during an interview with Bloomberg on Thursday (July 3).
The recent decline in the U.S. dollar's exchange rate has raised concerns about its status as the world's main currency, which Biden denied. He said, "The dollar's exchange rate has nothing to do with our strong dollar policy. We adopt a strong dollar policy to ensure the dollar maintains its status as the world's reserve currency in the long term."
Weakened by the growth-reducing effects of President Trump's tariff policies and the impact of aggressive diplomatic moves toward allies, the dollar index fell nearly 11% at closing on Monday (June 30), marking its worst first-half performance since 1973.
Biden said, "We are setting the stage for economic growth based on the Republican tax bill. We are curbing inflation and making the United States the best place for global capital. I believe this will continue to happen." This year, central bank policymakers in China and Europe have questioned the status of the U.S. dollar, suggesting that the global financial system needs transformation to reduce its long-term reliance on the dollar.
However, Biden questioned this possibility. He said, "It is a fallacy to think that the yuan could become a major global reserve currency. It is an unconvertible currency; how can it become a reserve currency?"
Biden has been skilled in foreign exchange trading throughout his decades-long career in hedge funds. He said, "The essential condition for a reserve currency is that it can be freely traded."
Original article: https://www.toutiao.com/article/1836696148212747/
Statement: This article represents the personal views of the author.