Home News Guyana gears to utilise Chinese currency
Once consultations have been completed and approval given, Guyana could be among Caribbean countries that use the Chinese currency — the Yuan Renminbi — within their respective economies.
Finance Minister Winston Jordan recently attended, in neighbouring Barbados, a conference wherein Caribbean countries explored this possibility. Minister of State, Joseph Harmon, has said discussions at that conference centred on deepening investment cooperation between China and the Caribbean, and how the use of the Chinese currency can enhance trade facilitation, financing, and banking relationships.
It was explained that the bilateral arrangement between China and countries with a large presence of Chinese nationals would be easier facilitated by the use of the Yuan Renminbi. Although unable to say whether this was approved across the region, Harmon noted that the move was to facilitate bilateral trade at this point in time.
WIC News on Thursday reported William Warren Smith, President of the Caribbean Development Bank (CDB), as saying at that Barbados conference that the Chinese Renminbi may be able to protect the Caribbean region’s access to global financial services at a time when many international financial institutions were withdrawing their services from the region.
“The conference comes at a time when the ability of many Caribbean countries to engage in international trade and financial services is being undermined by the withdrawal of correspondent banking services by North American and European financial institutions,” Smith is quoted as saying.
The CDB president highlighted the partnership between China and the Caribbean, which has been growing in recent decades.
“China has itself been successfully undergoing major economic transformation, built on the win-win strategy of opening up for common prosperity,” he said. “It is that strategy that helps to explain the strengthening of China-Caribbean diplomatic ties and our increasing engagement in the areas of investment, contracted projects, and bilateral trade over the past two to three decades.”
One of the spin-off benefits of the transformation taking place in China is the rapid internationalisation of the Renminbi, starting in 2006 with the floating of the exchange rate.
One of the region’s leading economists told WIC News that working with China has its benefits, but the region “must not oversell itself to the powerhouse” and lose any independence.
Renminbi is now an International Monetary Fund (IMF) reserve currency. As an IMF reserve currency, the Renminbi is now in the IMF’s Special Drawing Rights’ (SDR) basket, which determines currencies that countries can receive as part of IMF loans. The other currencies in the basket are the U.S. dollar, the Euro, the Yen and the British Pound.
Ambassador of the People’s Republic of China to Barbados, Wang Ke, has said China is continuing to build economic and diplomatic partnerships in the Caribbean, and welcomes further efforts at cooperation.
“In the wake of the 2008 financial crisis, many Caribbean countries have struggled with bottlenecks, such as having indebtedness, difficult access to finance, and insufficient connectivity,” the ambassador said.
“And (in) addition (to) rising global protectionism and uncertainties between the Caribbean and its traditional partners, the Caribbean countries are facing more challenges in achieving sustainable growth.
“China is working on building new international relations based on cooperation and mutual benefit, and stands ready to strengthen global cooperation with the Caribbean countries,” the Chinese ambassador has said.
China has been a member of the CDB since 1998.