BOMBSHELL – ANOTHER COUNTRY DUMPS THE U.S. DOLLAR – ARGENTINA TO PAY IN YUAN IN TRADE WITH CHINA – EVEN AS ‘THE YUAN SURPASSES THE GREENBACK TO BECOME THE MOST-USED CURRENCY IN CHINA’S CROSS-BORDER TRANSACTIONS’
Argentina drops dollar in trade with China
Argentina will aim to pay for the bulk of its monthly imports from China in yuan rather than US dollars, Economy Minister Sergio Massa announced on Wednesday. Buenos Aires and Beijing signed a currency swap agreement last year, aimed at stemming the outflow of foreign currency from Argentina’s central bank.
China is currently Argentina’s second largest trade partner after Brazil, and the second biggest destination for Argentinian exports. Argentina’s total imports from China were around $13.5 billion in 2021, according to the United Nations database on international trade.
Massa said that Buenos Aires will pay the equivalent of $1 billion in yuan for Chinese goods and services this month, with $790 million of monthly imports paid for in yuan each month thereafter. The currency swap agreement, expanded and finalized earlier this year, also allows Argentinian exporters to make settlements in yuan or dollars, to help balance the flows of foreign currencies in the central bank.
Russia completely abandons dollar, euro in energy trade – deputy PM
On a visit to China earlier this month, Brazilian President Luiz Inacio Lula da Silva called on developing nations to move away from the US dollar in favor of their own currencies. India is also working to use its own currency or yuan to settle trade with China, while Russia started to accept payments for its exports from a number of countries in rubles and Chinese yuan.
The dollar’s share in global reserves fell ten times faster last year than over the past two decades, the CEO of London-based asset management company Eurizon, Stephen Jen, recently told Bloomberg. The process has accelerated after other countries saw Russia’s US dollar and Euro-denominated assets frozen abroad and Moscow cut from the SWIFT global financial messaging system.
US Secretary of the Treasury Janet Yellen recently admitted that the role of the dollar as the world reserve currency could diminish due to Washington using its leverage over the global financial system to pursue its geopolitical goals through sanctions. RT.COM
China shifting away from dollar in cross-border transactions – data
The yuan surpassed the US dollar to become the most-used currency in China’s cross-border transactions last month, Reuters reported on Wednesday citing official data.
Cross-border payments and receipts in yuan surged from $434.5 billion in February to a record $549.9 billion in March, according to calculations by the outlet, based on data from the State Administration of Foreign Exchange.
The Chinese currency was used in 48.4% of all cross-border transactions, reflecting a trend of shifting away from the dollar, as well as Beijing’s efforts to promote the use of the yuan. The share of the greenback in China’s international settlements dropped from 48.6% in February to 46.7% last month.
The volume of cross-border transactions covers both current and capital accounts, the outlet said. Although the share of the yuan in global settlements is still relatively low, it has been steadily on the rise over the past several years.
China’s attempts to move away from the dollar in international trade have sped up against the backdrop of sweeping sanctions imposed by Western nations against Russia, a major global energy producer and exporter. Indian policymakers have also taken steps towards shifting away from the greenback to rubles and rupees in mutual trade with Moscow.
Russia has been boosting its use of alternative currencies in transactions since last year. President Vladimir Putin has suggested that the Chinese yuan should be used more widely, not only in trade with China, but also in Russia’s transactions with countries in Africa and Latin America. The latest data from the Bank of Russia shows that the yuan has become a major player in Russia’s foreign trade.
RT.COM
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