Renminbi (RMB)/Yuan Appreciation & Internationalization
- Thread starter supercat
- Start date
looks like Russian Yuan reserves are held in Chinese bonds. Kind of what I expect. But I wonder if the Iranians are holding the same.
I think it's a good thing for RMB in general if ASEAN countries are phasing out USD and JPY in trading with each other because that would naturally lead to more RMB in their trading with China. Also, this would continue to hurt USD dominance in world market.
I think it's a good thing for RMB in general if ASEAN countries are phasing out USD and JPY in trading with each other because that would naturally lead to more RMB in their trading with China. Also, this would continue to hurt USD dominance in world market.
It's no longer Sany excavator going brrrr... It is now tunnel boring machine going brrr...
It could also mean that ASEAN may use more RMB for their own trade with each other, if it’s cheaper.
Whats the difference between this and the UAE settlement earlier this week?
Indonesian President：Moving away from western payment systems is necessary
An official meeting of all ASEAN Finance Ministers and Central Bank Governors kicked off on Tuesday (March 28) in Indonesia. Top of the agenda are discussions to reduce dependence on the US Dollar, Euro, Yen, and British Pound from financial transactions and move to settlements in local currencies.
The meeting discussed efforts to reduce dependence on major currencies through the Local Currency Transaction (LCT) scheme. This is an extension of the previous Local Currency Settlement (LCS) scheme that has already begun to be implemented between ASEAN members.
This means that an ASEAN cross-border digital payment system would be expanded further and allow ASEAN states to use local currencies for trade. An agreement on such cooperation was reached between Indonesia, Malaysia, Singapore, the Philippines, and Thailand in November 2022. This follows from Indonesia’s banking regulator, stating on March 27 that the Bank of Indonesia is preparing to phase out Visa and Mastercard while introducing its own domestic payment system.
Indonesian President Joko Widodo has urged regional administrations to start using credit cards issued by local banks and gradually stop using foreign payment systems. He argued that Indonesia needed to shield itself from geopolitical disruptions, citing the sanctions targeting Russia’s financial sector from the US, EU, and their allies over the conflict in Ukraine.
Moving away from Western payment systems is necessary to protect transactions from “possible geopolitical repercussions,” Widodo said.
Dodit Proboyakti, a board member of the Indonesian Credit Cards Association (AKKI), has reported in Russian media that Indonesia would apply the experience of Russia and its MIR payment system in promoting its own domestic financial network.
Of the ASEAN nations, just Singapore has enforced sanctions on Russia, while all other ASEAN nations continue to trade with the country. There has been alarm at being caught up in US-led secondary sanctions, as are short to impact Central and South Asia countries involved in cotton manufacturing, a major industry in the region employing millions of people.
A decision by ASEAN to disengage from the West’s currencies and especially the US dollar and Japanese Yen will put pressure on Tokyo especially as where its future trade alignments are – with the United States, or with Asia.
Foreign investors in Asia may wish to consider the amount of US dollars, Euros and Yen held in their accounts in light of a pending ASEAN currency trade decision. Professional discussions should be taken regarding any movement of company funds to alternative currencies.
An official meeting of all ASEAN Finance Ministers and Central Bank Governors kicked off on Tuesday (March 28) in Indonesia. Top of the agenda are discussions to reduce dependence on the US Dollar, Euro, Yen, and British Pound from financial transactions and move to settlements in local currencies.
The meeting discussed efforts to reduce dependence on major currencies through the Local Currency Transaction (LCT) scheme. This is an extension of the previous Local Currency Settlement (LCS) scheme that has already begun to be implemented between ASEAN members.
This means that an ASEAN cross-border digital payment system would be expanded further and allow ASEAN states to use local currencies for trade. An agreement on such cooperation was reached between Indonesia, Malaysia, Singapore, the Philippines, and Thailand in November 2022. This follows from Indonesia’s banking regulator, stating on March 27 that the Bank of Indonesia is preparing to phase out Visa and Mastercard while introducing its own domestic payment system.
Indonesian President Joko Widodo has urged regional administrations to start using credit cards issued by local banks and gradually stop using foreign payment systems. He argued that Indonesia needed to shield itself from geopolitical disruptions, citing the sanctions targeting Russia’s financial sector from the US, EU, and their allies over the conflict in Ukraine.
Moving away from Western payment systems is necessary to protect transactions from “possible geopolitical repercussions,” Widodo said.
Dodit Proboyakti, a board member of the Indonesian Credit Cards Association (AKKI), has reported in Russian media that Indonesia would apply the experience of Russia and its MIR payment system in promoting its own domestic financial network.
Of the ASEAN nations, just Singapore has enforced sanctions on Russia, while all other ASEAN nations continue to trade with the country. There has been alarm at being caught up in US-led secondary sanctions, as are short to impact Central and South Asia countries involved in cotton manufacturing, a major industry in the region employing millions of people.
A decision by ASEAN to disengage from the West’s currencies and especially the US dollar and Japanese Yen will put pressure on Tokyo especially as where its future trade alignments are – with the United States, or with Asia.
Foreign investors in Asia may wish to consider the amount of US dollars, Euros and Yen held in their accounts in light of a pending ASEAN currency trade decision. Professional discussions should be taken regarding any movement of company funds to alternative currencies.
It's been a strawman of sorts that the only thing that matters is USD use and Yuan use. So if the Yuan is not the next reserve currency and widely adopted, the US is winning.
A multi-polar world doesn't rely only on China weakening US dominance. It just need alternatives to US power everywhere.
No. If US dollar usage being reduced while Yuan usage remain unchanged，China is winning. The US has a lot more to lose than China，if neither currency is being used worldwide.
Dollar widely adopted = US has control，Yuan widely adopted = China has control，Dollar&Yuan narrowly adopted = no one has control. For China，no one has control still better than US has control，at least at this stage.
Again，it's the status quo power has more to lose in this situation. China doesn't have to gain dominance，as long as the US dominance weakened around the globe，it's a win for China.
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That's what I just said. I'm saying there's an argument out there everything is fine for the US dollar as long as people see the Yuan as unstable or hate China or whatever many reasons.
I'm hoping the eventual adoption of a SDR-like trade weighted currency alternative for SCO or BRICS countries.
India hates the optics of using the Yuan for Russian trade so something like this is good too.