The Financial Times reports this morning that the European Central Bank gave a “seal of approval” to the Chinese renminbi with a purchase of 500 million euros worth of the currrency for its reserves – a small transaction but with “huge symbolic significance.” It is also important symbolically that the ECB sold dollars to purchase the renminbi. This ECB purchase may be the most important development to date with respect to China’s establishing the yuan as a global reserve currency, and a response to the cool relations between the U.S. and Europe on display at the recent G-7 meeting. – MK
