Renminbi (RMB)/Yuan Appreciation & Internationalization

sunnymaxi said:

https://twitter.com/i/web/status/1636074487807463424

@escobar this post is suitable for this thread. and i don't trust on Bloomberg. can you plz explain what is the main problem of RMB.

@tphuang sir can explain

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I don't see any major problems with that opinion piece. Seems quite level headed to me. The war has indeed accelerated yuan usage in the world, but this shift is more predominately shown in Russia and a bit in Central Asia.

So yeah, first Russia, then RMB influence will spread even more to Central Asia, Middle East and beyond. Its a step by step process. Russia was the first domino to fall, which is why we must thank the West for providing China with such an invaluable help

Overbom said:

I don't see any major problems with that opinion piece. Seems quite level headed to me. The war has indeed accelerated yuan usage in the world, but this shift is more predominately shown in Russia and a bit in Central Asia.

So yeah, first Russia, then RMB influence will spread even more to Central Asia, Middle East and beyond. It’s a step by step process. Russia was the first domino to fall, which is why we must thank the West for providing China with such an invaluable help

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It is like a friggin bank contagion and must be nicked in the bud! Let’s start by arresting as many Chinese business people we can get our hands on!

sunnymaxi said:

https://twitter.com/i/web/status/1636074487807463424

@escobar this post is suitable for this thread. and i don't trust on Bloomberg. can you plz explain what is the main problem of RMB.

@tphuang sir can explain

Click to expand...

here is the link behind paywall

I think overall, he is talking here about issues that I've raised multiple times. This year at some point, trade with China might reach 60% of Russia's import and 40% of Russia's export. Making the economic relationship more akin to US/Canada. So, that's true.

On the other hand, his comment about Yuan being unconvertible is not true. There is a convertible offshore version of Yuan that is widely used in HK. As time goes on, there will be more offshore yuan available for use in countries with Yuan clearing centers. I do think China needs to loosen more control in its currency if it wants more Yuan settlement

China giving a loan to Saudi National Bank in RMB so that it can be used in trade with China
That sounds like a pretty good idea to encourage Yuan usage.

Putin:" We are in favor of using the Chinese yuan for settlements between Russia and the countries of Asia, Africa , and Latin America. I am confident that these forms of settlement in yuan will develop between Russian partners and their counterparts in third countries."..

sunnymaxi said:

Putin:" We are in favor of using the Chinese yuan for settlements between Russia and the countries of Asia, Africa , and Latin America. I am confident that these forms of settlement in yuan will develop between Russian partners and their counterparts in third countries."..

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I wonder if "Asia" includes India in this context, given India and Russia had recently begun settling in a mix of rubles and rupees.

CMP said:

I wonder if "Asia" includes India in this context, given India and Russia had recently begun settling in a mix of rubles and rupees.

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probably doesn't include India, UAE and countries with aspiration of their own currency

CMP said:

I wonder if "Asia" includes India in this context, given India and Russia had recently begun settling in a mix of rubles and rupees.

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India prefers to use UAE's currency

Overbom said:

India prefers to use UAE's currency

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There's no end to the list of things that India prefers but cannot obtain. India's preference for UAE's currency is an implicit acknowledgement that they must compromise due to most if not all trading partners being unwilling to accept rupees.

Good take here is who will be buying oil & gas in Yuan. Let's say Russia & Iran both now sell oil to non-Western countries in Yuan and obviously China does it too. At this rate, GCC countries will have to speed up their adoption of Yuan in oil trade. We will see how far this goes.

Aside from this, keep in mind that China has been hoarding LNG supplies on the market. Which means, it will be able to resell the portion that it does not need in RMB. Same with oil, it can sell refined oil product in Yuan. Just wait until the day you can but diesel spot for cheaper on the Shanghai international energy exchange than CME or ICE, what will diesel buyers do in that case? Hoarding all this energy supply and making it easier to use Yuan is the only way to increase its internationalization.