Nick Beams – World Socialist Web Site – The significance of the elevation of the Chinese renminbi

The elevation the Chinese renminbi (also known as the yuan) to the basket of global currencies making up the International Monetary Fund’s special drawing rights (SDRs), in effect making it an international reserve currency, is unlikely to have any major immediate effects. But it does underscore the vast transformation in the foundations of the world economy over the past three decades resulting from the long-term economic decline of the US.

As the Stratfor web site noted in its comment on the decision, it is the first time that the basket of reserve currencies, which had previously comprised the dollar, the British pound, the Japanese yen and the euro, will include the currency of a country not allied with the US.

The post-World War II monetary order, of which the IMF was a part, was grounded on the overwhelming economic dominance of the US. In 1945, Stratfor pointed out, US gross domestic product was estimated to be as high at 50 percent of the world total. This year it will be 22 percent.

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