Can we cope with a casino currency?

China is forcing countries to accept trade in its currency, the yuan, wrote PS Mehta. "Despite the threat of difficult debt burdens, 14 countries of eastern and southern Africa joined a forum in Harare, Zimbabwe, to consider the use of China's yuan as a reserve currency in the region. This was in recognition of the fact that most countries have availed loans from China and it may make economic sense to repay them in yuan." But perhaps, it is not a case of "despite the threat" but "because of". China gives loans to African nations at market rates of interest and it is possible that they are finding it difficult to repay the loans. These leaders have to be careful. There is widespread belief that Robert Mugabe of Zimbabwe was forced to step down by Chinese pressure. Apparently, China forced Mugabe to talk to opposition leader Morgan Tsvangirai in 2008 to protect the Beijing Olympics from boycott by western countries. In 2016 the International Monetary Fund included the Chinese yuan in the basket of currencies that make up Special Drawing Rights which means that the yuan should be freely tradable. But it is not. Within 3 months China started imposing controls on capital outflows and foreign currency transactions to prevent the currency from devaluing sharply. "As long as they have the threat and reasonable expectation that in a moment of panic or crisis they would clamp down on the movement of capital so it doesn't disrupt their economy, there is no way anyone would view the RMB as a reserve currency," said J Williams, president of the Federal Reserve Bank of San Francisco. What of India? Our currency, the rupee accounts for just "1% of global foreign exchange turnover". Mehta thinks that India should "consider rupee internationalization integral to foreign policy strategy before it's too late". International currency transaction is around $3 trillion everyday which is more than India's annual GDP of $2.6 trillion. Financier George Soros made $1 billion dollars in one week in 1992 by short selling pound sterling and forcing the pound out of the European Exchange Rate Mechanism. Unlike China, India always makes a loss in trade. Our exports grew by 20.18% to $28.86 billion in May, but our trade deficit grew to a four-month high of $14.62 billion, because our imports grew by 14.85% to $43.48 billion. Our current account deficit grew by 42% to $160 billion. Just increasing the level of foreign portfolio investment in our government and corporate bonds by the Reserve Bank created panic among experts. If China thinks it can conquer the globe, many have tried before. We should not try.