Categories
News
Date
2024-09-16
Complete Shift to Yuan: Abandoning USD, Euro, Yen
Recently, the Chinese yuan has been receiving continuous favorable news, with its international status continuously rising and gaining recognition from more and more countries.
At the beginning of the new year, the Central Bank of Russia announced a significant piece of news: in the future, the sovereign wealth fund will only purchase the Chinese yuan, abandoning other currencies such as the US dollar, the euro, and the Japanese yen.
After a year of continuous testing, this superpower has completely shifted towards the Chinese yuan.
Last month, Gulf countries also indicated that future oil and gas trade with China will be settled in Chinese yuan, and Saudi Arabia has already completed its first cross-border payment transaction with China in yuan.
At the same time, the Chinese yuan has been rising for three consecutive months, regaining most of its lost ground.
01. Russia
Russia's sudden decision to use only the Chinese yuan in its sovereign fund is not without reason.
As a major country, Russia has economic dealings with various nations, and the US dollar once held an important position in this sovereign fund.
Advertisement
However, due to the European conflict that occurred last year, Russia successively removed the US dollar and the euro from its sovereign fund.
At the same time, Russia's trade with China has been increasing, with a significant amount of transactions conducted in Chinese yuan. Therefore, it is quite normal for Russia to increasingly prefer using the Chinese yuan or purchasing it.Analysis of various factors suggests that Russia's choice to cooperate with China can bring benefits to Russia. Firstly, Russia can obtain stable foreign exchange income from China. Secondly, the renminbi has unlimited potential and can effectively promote Russia's economic development.
Such cooperation is a win-win situation for us, as we can obtain ample resource replenishment from Russia.
China has a large population base and strong purchasing power for gold. Coincidentally, Russia is one of the countries with the richest gold resources, so this mutually beneficial relationship can promote the economic development of both countries.
02, Joint Choice
Due to restrictions, Russia's choice of the renminbi at this time is actually a gradual process.
China's strength is evident. Russia has learned from various events in recent years that the renminbi has many advantages, and its exchange rate is relatively stable, with great potential for appreciation.
The current strategy change in Russian banks indicates that the status of the renminbi has indeed increased significantly.
Now, a total of 50 banks can handle the storage of renminbi, but in fact, at the beginning of last year, only 13 banks could handle it. This shows that the renminbi is growing and gradually becoming stronger in the international trade market.
In the past, ordinary Russians tended to choose the US dollar and the euro as their foreign deposits, but now renminbi deposits have become the main foreign currency deposits in Russia.
This choice of the Russian people is almost synchronized with the choice of the country's sovereign wealth fund.03, GCC
Just a month ago, China and the Gulf Cooperation Council (GCC) also reached an agreement at the high-level summit to continuously cooperate in oil and gas trade in the coming years, and gradually use the Chinese yuan as the main settlement currency for oil and gas trade.
At the same time as this news spread, Yiwu, China, and Saudi Arabia just completed the first cross-border payment business in Chinese yuan, marking a new milestone for the yuan.
Moreover, after entering 2023, in just two weeks, the Chinese yuan has approached the 6.7 threshold.
The Chinese yuan has risen by more than 2,100 points since the beginning of the year.
It is evident that the Chinese yuan has established a solid position in the global market and has been recognized by many countries. The appreciation of the Chinese yuan symbolizes that China's economic development has taken deep roots and grown strong.
However, China has also experienced a bumpy development path before achieving today's brilliant blueprint.
In the past, the use rate of the Chinese yuan in the world was not high, but in recent years, the trend of the Chinese yuan has shown eye-catching fluctuations. China has also demonstrated its strength in global economic development, which is evident to many countries.