Tuesday, September 16, 2014

China to Open RMB Clearing Bank in Paris

The BRICS have been pretty quiet since their summit back in July in Brazil. But China (and Russia) just keep steadily moving forward in their quest to diminish the use of the US dollar as world reserve currency. This article in the BRICSPOST mentions the latest move, a new RMB clearing bank in Paris.

We already know that both Russia and China are working all over the globe to replace the use of the US dollar wherever they can. This BRICSPOST article is chock full of quotes about all that which are just below.

"Competition is fierce among Europe’s major financial centres, Frankfurt, London and Luxembourg to trade in China’s currency."
"Beijing is keen on substituting the US dollar with the yuan in all of China’s trade with other countries. The Chinese currency now trades directly with the Japanese yen, the Australian dollar, the Brazilian real, the EU’s euro, the New Zealand dollar and many other currencies."
"BOC became the RMB clearing bank in Frankfurt in June while China Construction Bank was authorized to be the RMB clearing bank in London."
"China stepped up plans to increase the international use of its currency last October with an agreement between the European Central Bank and the PBOC to swap euros and yuan."
"BOC has so far opened more than 1,200 inter-bank RMB clearing accounts and 1.7 million RMB accounts for corporate and individual clients overseas."
"In a major highlight of an investment meet earlier this month, Moscow and Beijing have entered into a pact to boost use of the rouble and yuan for trade transactions."
“We’re going to encourage companies from the two countries to settle more in local currencies, to avoid using a currency from a third country,” Russia’s Deputy Prime Minister Igor Shuvalov said referring to the US dollar."
"Meanwhile, the UK will become the first Western country to issue an offshore bond in the Chinese renminbi. This was announced after discussions between Chinese Vice Premier Ma Kai and UK Chancellor of the Exchequer George Osborne earlier last week."
My added comment: The move to replace the US dollar in global trade has been underway for some time now. But to be a reserve currency, there needs to be a healthy bond market available. We see the starting up of the part of the process here. Just another step in the march to diminish the US dollar as sole global reserve currency. So far the change in the monetary system we watch for is slow, but steady. But it is happening all the same.

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