Henny Sender notes that the renminbi is used less in private transactions now then it was four years ago ("Dollar unchallenged for now as China falters in renminbi push," April 4). The weight's that Asian central banks assign to the renminbi in their implicit currency baskets are also lower now than they were four years ago. Instead, the US dollar reigns supreme.
Emerging Asia's current account surpluses have increased even as China's have decreased. These surpluses generate protectionist pressures in the US. To offset this, Asian currencies should appreciate together against the US dollar. This could happen If policymakers dialogue intensively about exchange rate policy and put more weight on regional currencies rather than the dollar in their currency baskets.
April 15, 2019 Financial Times
