U.S. Dollar Declared the Official Lending Currency of the AIIB.
With the AIIB officially open for operations comes the announcement that the new Chinese-led bank will use the U.S. dollar as its official currency of lending. This stems from the fact that the RMB would have been problematic for many nations due to the pervasive use of the USD, making loans in RMB quite undesirable at this point for many countries. Although the IMF recently added the RMB as a global reserve currency, it has yet to be determined if it will eventually become an official lending currency of the AIIB at a later time.
AIIB Officially open for Business
Chinese President Xi Jinping on Saturday inaugurated the Asian Infrastructure Investment Bank at a ceremony attended by about 450 people in Beijing. President Xi Jinping noted that this is a historic moment for China and a boost in the country's effort to take more international responsibility by working to improve the investment environment and integration in Asia by means of the new 57-member lending institution. AIIB is perceived to symbolize China’s rise and challenge to the global financial system dominated by the U.S.
The U.S. and Japan are not members of AIIB but more than a dozen European countries decided to join the AIIB. Japan and the United States are skeptical about the quality of AIIB's lending standards and governance as well as whether infrastructure projects will be environmentally friendly. Taiwan is also perceived to be worried about China's growing influence in Asia.
The creation of the AIIB in less than three years is considered widely welcomed by developing countries due to limitations in the lending capacities of existing multilateral institutions such as the World Bank and the Asian Development Bank. These institutions are not expected to meet the fast-growing demand for infrastructure investment.
Expert, Liu Baocheng, Offers Insight on Some of the AIIB's Initial Projects
With the AIIB officially open for operations comes the announcement that the new Chinese-led bank will use the U.S. dollar as its official currency of lending. This stems from the fact that the RMB would have been problematic for many nations due to the pervasive use of the USD, making loans in RMB quite undesirable at this point for many countries. Although the IMF recently added the RMB as a global reserve currency, it has yet to be determined if it will eventually become an official lending currency of the AIIB at a later time.
AIIB Officially open for Business
Chinese President Xi Jinping on Saturday inaugurated the Asian Infrastructure Investment Bank at a ceremony attended by about 450 people in Beijing. President Xi Jinping noted that this is a historic moment for China and a boost in the country's effort to take more international responsibility by working to improve the investment environment and integration in Asia by means of the new 57-member lending institution. AIIB is perceived to symbolize China’s rise and challenge to the global financial system dominated by the U.S.
The U.S. and Japan are not members of AIIB but more than a dozen European countries decided to join the AIIB. Japan and the United States are skeptical about the quality of AIIB's lending standards and governance as well as whether infrastructure projects will be environmentally friendly. Taiwan is also perceived to be worried about China's growing influence in Asia.
The creation of the AIIB in less than three years is considered widely welcomed by developing countries due to limitations in the lending capacities of existing multilateral institutions such as the World Bank and the Asian Development Bank. These institutions are not expected to meet the fast-growing demand for infrastructure investment.
Expert, Liu Baocheng, Offers Insight on Some of the AIIB's Initial Projects
Dean of the Center for International Business Ethics at the Beijing based University of International Business and Economics, Liu Baocheng, responds to questions concerning the AIIB's initial projects and structure. Watch the full interview HERE.
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