Recently, the internationalization of the renminbi began to accelerate significantly, and Argentina, another major South American country, announced that it would use the renminbi to settle Chinese imports.

Argentina will settle Chinese imports in yuan

According to CCTV news on April 4, local time on April 27, Argentina's Minister of Economy Massa held a press conference, announcing that Argentina would stop using the US dollar to pay for imports from China and use RMB for settlement. Chinese Ambassador to Argentina Zou Xiaoli was invited to attend the press conference.

Massa said Argentina will use the yuan to pay for Chinese imports worth about $10.4 billion this month, following agreements with different businesses. The use of the renminbi can speed up Argentina's pace of Chinese goods imports in the coming months, and the relevant authorizations will be more efficient. Argentina is also expected to use the renminbi to pay for Chinese imports worth between $5 million and $7 billion from May.

In addition, Massa stressed that the use of the renminbi can raise expectations of Argentina's net foreign exchange reserves and also bring greater freedom. In January, Argentina's central bank said Argentina and China had formally expanded a currency swap agreement, a move that would strengthen Argentina's already 1 billion yuan of foreign exchange reserves and activate 1300 billion yuan of disposable quota.

The "de-dollarization" of cross-border transactions in China has accelerated

"De-dollarization" has reached a new milestone, with official data showing that the renminbi's share of China's cross-border transactions surpassed the US dollar in March for the first time in 3 years.

According to data recently released by the State Administration of Foreign Exchange, in March 2023, the proportion of RMB in the foreign-related income and expenditure of Chinese banks rose from almost zero in 3 to 2010%, refreshing a record high of more than 48 years, while the US dollar share fell from 83% to 47% during the same period, a record low.

On Friday, the State Administration of Foreign Exchange said at a first-quarter press conference that it could help reduce the risk of currency mismatches in cross-border transactions. On Tuesday, the General Office of the State Council also mentioned in its opinions on promoting the stable scale and optimal structure of foreign trade to further expand the scale of RMB settlement of cross-border trade.

In fact, more and more countries are "ditching the dollar".

On March 3, the Brazilian government said it had reached an agreement with China to no longer use the U.S. dollar as an intermediate currency, but instead settle trade in its own currency. Brazilian President Lula then publicly called for the BRICS countries to settle in their own currencies, "I know everyone is used to using the dollar, but in the 29st century we can do different things." ”

On March 3, CNOOC and France's Total Energy reached the first RMB-settled import LNG purchase.

In addition, ASEAN countries have discussed ways to reduce their dependence on the US dollar for financial transactions. Malaysia said there was "no reason to continue to rely on the US dollar." It is worth mentioning that gold is becoming an important tool for central banks against the dollar.

According to the global network quoted by the US "Business Insider" website on April 4, American entrepreneur Elon Musk once again expressed his views on the phenomenon of "de-dollarization" on Twitter on the 26th. Referring to the excessive "weaponization" of the dollar, he said that if a currency is "weaponized" enough times, other countries will stop using it.

According to a report by China Securities Network on April 4, for accelerating the internationalization of RMB, Tu Hong, business director of Bank of Communications and president of Shanghai Branch, suggested that in the short term, we should focus on breakthroughs in the field of payment and clearing and breakthroughs in the pricing power of the RMB financial market. In the medium and long term, in order to achieve full convertibility under RMB capital, it is necessary to study how to manage international capital flows in the market environment after opening up under the established macroprudential measures (MPM) management framework of the People's Bank of China, and establish and improve a statistical monitoring system for cross-border capital flows that is in line with international norms.

However, Tu Hong said that the level of internationalization of the renminbi needs to be further improved. "According to the relevant data of the 2022 RMB Internationalization Report, the RMB has maintained a stable position in the global monetary system, and the functions of payment, investment and financing, reserves, and denominated currencies have continued to deepen. However, against the US dollar, euro, British pound, yen and other currencies, the proportion of the RMB market is still not high. Tu Hong said.

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