Best Three Major Currencies for Major Global Economies
Three Major Currencies for Major Global Economies
Who are the Major Global Economies? The three most stable world economies include the United States, China, and Japan. Apparently, their three currencies, which are the USD, The Chinese Renminbi, and the Japanese Yen, are some of the most stable world currencies. Read on to get an insight on their stability and current ranking.
United States dollar denoted by the code USD and the sign $ is the official United States currency as well as its other insular territories. The dollar is divided into units of 100 cents. The currency is also known as Fiat money because it is commonly used national currency in most global trading and international transactions. The USD is also a primary reserve currency for the world. Many global nations use the currency as part of their official trading currencies and it also acts as a de facto currency. The USD also acts as the sole currency for Caicos and Turks Islands, British Virgin Islands, the Caribbean, and two of the British Overseas Territories.
There are five dollar notes which include the $1, $2, $5, $10, $20, $50, and $100 unit notes that are used in all regions where the currency is applicable. Currently, there are six coin units in circulation which include 1 cent, 5 cents, 1 dime, ¼ dollar, half a dollar, and 1 dollar. The dollar is one the most valuable and strongest currencies in the world and most exchange rates are made in comparison to the dollar.
The economy of the United States is the largest in the globe by nominal GDP. The nation’s economy, which stands at $18.5 trillion dollars, is about 24.5% of the gross global product. The nation is highly advanced in infrastructural development, has many natural resources, and advanced in technology. But the United States economy loses as a global leader in the China in Gross Domestic Product based on PPP.
The Chinese Renminbi
The Renminbi (RMB) is the legal currency of the People’s Republic of China, which is denoted by CNY, and the Chinese Yuan is its basic unit. The two are often used interchangeably to refer to the official Chinese currency. One Yuan has ten sub-divisions of units known as Jiao, and the Jiao is in turn, subdivided into ten. The RMB is the main legal tender in China’s mainland, but not the Macau and Hong Kong region. The RMB is issued by the People’s Bank of China. The value of the RMB was pegged to the USD up till 2005. As China transformed its economy, the currency was significantly devalued to enhance its competitiveness. By 2015, the RMB was the 5th most exchanged currency in the globe. By 2016 the RMB became the leading emerging market currency in the special drawing rights baskets of the IMF.
The Chinese economy has undergone serious transformations from a closed and centrally managed economy to the second leading economy’s position after the US. China’s economy is now larger in Gross Domestic Product based on PPP. But the difference nominal GDP between the two economies is still significant. The Chinese economy has been growing at a high rate with a rate of at least 7%. Its major activities include manufacturing and export of commodities. The country is endowed with rich resources. However, in the 2016 period, there has been some slight drop in the projected growth, and the growth is expected to continue slowing down up till 2021.
The Japanese Yen
The Yen denoted as JPY is the legal currency of the Japanese nation. The Yen is ranked as 3rd most exchanged currency after the USD and Euro. It is also the second most used reserve currency after USD, Euro, and Sterling Pound. The Yen concept was part of the Meiji government program of modernising Japan and it was fashioned after the European decimal system of currency. Before this system, the feudal fiefs could also issue currencies that are specific to their feudal regions known as Hansatsu but in incompatible denominational units.
Major Global Economies
The Japanese economy is ranked as the third in nominal GDP, but it goes down to the 4th position when compared to the Gross Domestic Product by PPP. The Japanese economy has faced difficult times since 2008 when it incurred recession occurrences. The growth in the economy has had a 0.5% growth in 2016, and there is positive hope that the nation is likely to grow further. But forecasts show that it will stay below 1% in the next half a decade. As such, there is some hope that the Japanese currency may have moderate gains in the future based on Major Global Economies.