On the 3rd, US Treasury Secretary Bessent stated that the idea that the Renminbi will become a major global reserve currency is "completely mistaken."
In an interview with Bloomberg, he made these remarks when asked about speculation that the global financial system might undergo changes to move away from long-term dependence on the US dollar.
He said: “Thinking that the Renminbi could become a major global reserve currency is simply wrong. It is not a freely convertible currency, so how could it become a reserve currency? China’s 1.4 billion people still want to move their money overseas.”
He stated that a prerequisite for a reserve currency is that it can be freely traded, but China maintains capital controls.
He also said: “I saw European Central Bank President Lagarde say a few days ago that maybe the euro’s opportunity has come, but I can tell you, if the euro/dollar reaches 1.20, Europeans will definitely complain about it being too strong again. They’d better be careful what they wish for.”
Recent Dollar Depreciation Does Not Affect Its Status
In addition, Bessent pointed out that the recent depreciation of the US dollar does not affect its status as the world’s main reserve currency.
He said: “The exchange rate of the dollar is unrelated to a strong dollar policy. We adopt a strong dollar policy to ensure the dollar remains the world’s reserve currency over the long term.”
He stated: “We have laid the groundwork for economic growth with the Republican tax law. We have curbed inflation, making the United States the best destination for global capital. I believe all this will continue.”
He pointed out that the US is well aware of the responsibilities that come with being the global reserve currency.
He said: “Since World War II, there have always been predictions that the dollar would lose its reserve currency status. In my view, the skeptics will be proven wrong again this time.”
The US Dollar Index fell nearly 11% in the first six months of this year, marking the worst first half since 1973. Market concerns about Trump’s policies—including tariffs that could dampen economic growth and the current US administration’s tough stance towards longtime allies—are factors in this.