Yuan’s rise means world economy takes step to greater stability

Big step forward: New 100-yuan banknotes seen at the Bank of China Hong Kong Ltd headquarters in Hong Kong recently. IMF staff say the yuan has met the qualification terms for inclusion in the special drawing rights. – Bloomberg

BEIJING: With China’s yuan taking the biggest step yet toward joining the US dollar and euro as a top-rank reserve currency, the global economy may be approaching an era of greater stability.

So say economists who highlight the dollar’s role in the biggest financial crises in recent decades. Drawn to the liquidity and security of the unit of the world’s biggest economy, investors and governments relied on the dollar and produced dislocations including historically low borrowing costs in the 2000’s even as the Federal Reserve raised interest rates.