Friday, April 19, 2024
HomeGlobalDedollarisation: Yuan instead of dollars in global business? America is worried...

Dedollarisation: Yuan instead of dollars in global business? America is worried about the decision of this country

G is a 24 hour digital bureau: America’s tag of being the most powerful country is now in danger. America’s big banks, which have ruled the world based on their dollars for 70 years, are sinking. At the same time, efforts to challenge the dominance of the US currency dollar in international payments are gaining momentum. Taking advantage of this situation, China is rapidly advancing in hopes of becoming the new world trade leader through its currency, the yuan.

The world is moving towards de-dollarization?

For decades, major business transactions around the world have been done in dollars. From the film’s bumper overseas earnings to the defense pact between the two countries, payments also run into millions of dollars. According to one statistic, about 33 percent of the world’s loans are issued in US dollars. But will continue like this in the future? There is no guarantee, because maybe one day all such deals will start being in Chinese Yuan or Indian Rupees? Because there is speculation around the world about this big change.

Such news can no longer be called wrong, as many countries are now preferring other countries’ currencies instead of relying on the US dollar. This is called de-dollarization.

Argentina shocked America

Argentina has announced it will pay for Chinese imports in yuan instead of dollars to shore up its troubled economy. This month, Argentina set a goal of paying about $1 billion worth of Chinese imports in yuan instead of dollars. According to an official statement, further monthly imports will be paid for at 790 million yuan.

Argentine Minister Sergio Massa made the announcement after a meeting with Chinese Ambassador Xu Xiaoli and companies from various sectors. The decision has been taken at a time when the country is facing a shortage of foreign exchange due to a drastic drop in agricultural exports due to a historic drought. This will be considered as a blow to America as this South American country was totally dependent on America earlier.

China’s status in the world economy has increased

China, which has been embroiled in a trade war with the United States for almost a decade, has taken over the global market. China’s central bank, the People’s Bank of China (POBC), has made it easier for foreign investors to buy financial assets in yuan. China trades in local currencies with ten Southeast Asian countries that are members of ASEAN.

In a conversation with China’s state-run Global Times, Chinese experts said the process of internationalizing the yuan is related to efforts to reduce the use of the US dollar in the world.

Read more: Joe Biden: Biden in the White House fight again! Will oldest POTUS get a second chance?

China’s eye on foreign exchange reserves

China’s central bank has decided to increase the amount of cash in the market so that foreign investors can get yuan on demand. The bank has set its next goal to increase the availability of yuan abroad. If China succeeds in this objective, it will have far-reaching effects on the global economy. The Bank of China has also reduced the amount of foreign currency held as reserves by financial institutions. This is considered a step towards the internationalization of the yuan.

Read more: Jagannath Temple in London: The first Jagannath temple of ‘Puri’ in London!

The most important factor in becoming an international currency

Economists say that when a currency becomes an ‘international trade currency’, the biggest factor behind it is the country’s ‘exports’, not ‘imports’. China’s exports to the world have grown rapidly. Apart from the China factor, now if we talk about the Indian rupee, it is expected to become an international currency.

After Russia and Sri Lanka, various countries including many African countries are ready to trade with India in rupees. 64 countries, including Germany, are negotiating with India to trade in rupees. Indian money is accepted in many countries.

(Zee 24 Ghanta App Download Zee 24 Ghanta App to Read Latest News of Country, World, State, Kolkata, Entertainment, Sports, Lifestyle Health, Technology)

Recent posts