FX.co ★ Yuan to become reserve currency faster than expected

Assessing the prospects for the yuan after the US presidential election, experts agree that any outcome of this most important global event will hardly have a severe impact on China's national currency.

According to Bridgewater Associates founder Ray Dalio, investors should buy the yuan. "I don't believe the renminbi will be a viable reserve currency quickly. But I do believe it will happen much faster than anybody expects," he noted. Stock market statistics confirm his words as capital flows into China are rather favorable. Besides, market participants need to diversify assets. Dalio believes that regardless of who wins the presidency, US debt will balloon. This, in turn, will cause global investors who are overweight in US bonds to diversify into China.

Unlike its rival, the monetary policy of China remains relatively stable. Yield on China's 10-year government bonds is currently over 3%, while US treasuries yield has fallen below 1%.