China Makes Advances in Ditching the US Dollar for Settlements — Inks Deal With Brazil and Completes First Yuan LNG Purchase – Economics Bitcoin News
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In recent years, China has been taking significant steps towards reducing its reliance on the US dollar in international trade settlements. The country has been promoting its currency, the yuan, as an important medium of exchange for global transactions. In this regard, China has recently entered into a new agreement with Brazil and completed its first yuan liquefied natural gas (LNG) purchase.
The deal with Brazil is the latest in a series of moves by China to bolster the yuan’s status as an international currency. The two countries have agreed to conduct multiple cross-border transactions, including trade settlements, using their respective currencies. The deal was signed by representatives from Brazil’s central bank and the People’s Bank of China (PBOC).
This agreement with Brazil is a significant step towards making the yuan a more accepted currency in international trade. Brazil is the largest economy in Latin America and one of the largest trading partners of China. By reducing the use of the US dollar in this partnership, China is taking a step closer to achieving its goal of internationalizing its currency.
In another move, China has completed its first purchase of LNG using the yuan. The transaction involved the purchase of a shipment of LNG from Malaysia by China National Offshore Oil Corporation (CNOOC). The purchase was made using offshore yuan, which means that it was settled using the yuan outside of mainland China.
The use of yuan in this transaction is part of China’s efforts to promote its currency as a global reserve. Currently, US dollars dominate international trade settlements, and China’s efforts to reduce dependence on the dollar have been gaining momentum in recent years. This purchase marks a significant milestone in the development of the yuan as a viable international currency.
China has been steadily promoting the use of its currency for international transactions, and these recent developments suggest that these efforts are paying off. It remains to be seen if China’s internationalization of the yuan will make it a viable alternative to the US dollar. However, these recent deals with Brazil and the first yuan LNG purchase signal that China is moving closer towards this goal.
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