Renminbi (RMB)/Yuan Appreciation & Internationalization
- Thread starter supercat
- Start date
Will Chinese yuan appreciate to 5-6rmb to dollar in the future?
In the long run, I do believe Yuan would appreciate. China has a very low inflation rate compare with the West. Although, China's economy is under pressure now, the economy is growing stronger than most countries.
At the end of the day, the US or EU would lose their competitive against China as their currencies appreciate against China but at the same time have higher inflation than China. It is just fundamentally not possible for that to continue in the long run.
At the end of the day, the US or EU would lose their competitive against China as their currencies appreciate against China but at the same time have higher inflation than China. It is just fundamentally not possible for that to continue in the long run.
Do you think de-dollarization will affect the value of the dollar?
Countries should migrate away from comparing their currency to the USD if people are serious about dedollarizarion and instead benchmark their currency to their majors trading partners, a multi-currency index or even precious metals. By using USD as a base, it keeps reinforcing the emotional value of the dollar as the metric to look up to and achieve.
If you compare the RMB to other major currencies eur, jpy, aud, cad, rub, etc, its value is relatively stable or slowly increasing. The USD that’s the major outlier.
As long as the US is still the sole superpower, Dollar would still command extraordinary influence on the world. Dedollarization has only become fashionable due to What the West has done to Russia through their monopoly of the world financial system.
US has been able to get away from its printing press and abuse of the dollar as the main reserve currency but the global south does feel the urgency to stop relying on dollar as we have witnessed how the Fed interest rate cycle has always put many developing countries on the brink such as Bangladesh, Pakistan, Sri Lanka, many African nations and even a few Latin American nations and Southeast Asian countries. However, these things take time.
Dollar would lose value but dollar as the reserve currency has only dropped less than 10% over the years as most central banks in the world still accumulate and store their foreign currency reserve in dollar. As long as many elites, wealthy and corrupted officials still view the US or the West as the safe haven for their ill gotten gains, I do think it would take a long time before dollar to truly devalue. To answer your question, I do think dedollarization would affect the value of the dollar but there are only a few alternatives to dollar and most of them have also have their own shortcomings such as Euro, Yen and even Yuan. None of them can dethrone dollar so dollar devaluation would only be slow and fluctuate.
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Not much. USD value mostly based on monetary policy. In other words dedollarize may accelerate, but value may still up even faster due to certain policy.
How do people fund their alipay and wechat pay accounts? By using CIPS or swift? Do people worldwide pay their visa card and master card bills by using swift?
PiSigma
"the engineer"
Neither cips or swift is needed for Alipay or WeChat because 99.9% of it is in China using yuan. Cips and swift are for bank transfers and international money movements.
If you pay visa or MasterCard it doesn't get registered in swift unless u are using it overseas. Say if I buy something at home on my visa, when I pay it, it is 100% in CAD between my two accounts.