Ending dollar dominance in world market | Updates

[1ndy]

How it will benefit the common people of this subcontinent?

*Genuine question no trolling...

 

[Muhammed45]

How it will benefit the common people of this subcontinent?

*Genuine question no trolling...

TBH, India is in sphere of US influence nowadays not for benefit Indian people but to be a barrier for Chinese. USA will use you until needs you, never mind

Actually it is something to escape from US sanctions imposed on growing countries, having a multi polar economical system, to stop buying US imposed inflation on other nations, to stop buying recklessly printed dollar with no backing in real world, to stop US bullying on other nations, to stop US adventures around the world, to stop US terrorism I the world such as ISIS and it's lap dogs for example Israelis, to stop US ethnic cleansing around the world, etc.

 

[1ndy]

TBH, India is in sphere of US influence nowadays not for benefit Indian people but to be a barrier for Chinese. USA will use you until needs you, never mind

Actually it is something to escape from US sanctions imposed on growing countries, having a multi polar economical system, to stop buying US imposed inflation on other nations, to stop buying recklessly printed dollar with no backing in real world, to stop US bullying on other nations, to stop US adventures around the world, to stop US terrorism I the world such as ISIS and it's lap dogs for example Israelis, to stop US ethnic cleansing around the world, etc.

Some more questions,

• Many of the biggest economies (EU, and US itself) will still use USD even after fall of dollar.
• A new currency (Chinese) will dominate if USD falls completely and China will be in a same position to dictate terms as US is now.

Q1 - as per point 1, Western world can still sanction half of the world and stop buying and selling things. Won't it only hurt developing economies?

Q2 - as per point 2, how will you ensure that China will not become arrogant as US is now?

 

[Muhammed45]

Some more questions,

• Many of the biggest economies (EU, and US itself) will still use USD even after fall of dollar.
• A new currency (Chinese) will dominate if USD falls completely and China will be in a same position to dictate terms as US is now.

Q1 - as per point 1, Western world can still sanction half of the world and stop buying and selling things. Won't it only hurt developing economies?

Q2 - as per point 2, how will you ensure that China will not become arrogant as US is now?

I don't think that dollar will fall or it will be destroyed. It looks illogical, dollar has an absolute dominance in the world market and the goal is ending it with introducing an alternative for all other countries. Remember that EU countries are in trade war with US too not as intense as China US trade war but it exists. And you can witness it in interviews of German politicians.

We just want an alternative and petro Yuan can provide it, beside it, you can use Euro, Japanese Yen, and other strong currencies as a mediator. This dollar dominance is avoiding it, like a cancer that wants all the benefits for itself. After breaking this dominance, many currencies can play the role of a mediator having real gold as their backing the real standard. Not like the dollar that US government recklessly prints and imposes her own inflation on all the world nations, like an slavery system. Dollar will not fall or get destroyed, it's unfair dominance will be gone if China stands and Russia protects her. USA has almost 20 trillion debt, has printed nearly 20 trillion dollar, if you had little economic knowledge like me, you would understand how this slavery system works out.

 

[1ndy]

I don't think that dollar will fall or it will be destroyed. It looks illogical, dollar has an absolute dominance in the world market and the goal is ending it with introducing an alternative for all other countries. Remember that EU countries are in trade war with US too not as intense as China US trade war but it exists. And you can witness it in interviews of German politicians.

We just want an alternative and petro Yuan can provide it, beside it, you can use Euro, Japanese Yen, and other strong currencies as a mediator. This dollar dominance is avoiding it, like a cancer that wants all the benefits for itself. After breaking this dominance, many currencies can play the role of a mediator having real gold as their backing the real standard. Not like the dollar that US government recklessly prints and imposes her own inflation on all the world nations, like an slavery system. Dollar will not fall or get destroyed, it's unfair dominance will be gone if China stands and Russia protects her. USA has almost 20 trillion debt, has printed nearly 20 trillion dollar, if you had little economic knowledge like me, you would understand how this slavery system works out.

TBH, i don't have economic knowledge at. And thank for detailed reply.

 

[1ndy]

@mohammad45, in short, you are saying that there shouldn't be any single dominating currency? Am i right??

 

[Muhammed45]

@mohammad45, in short, you are saying that there shouldn't be any single dominating currency? Am i right??

Yes you are right

Petro dollar is backed by American war machine of democracy. Anyone who wants to get rid of it, would be targeted by it. Gaddafi had nuclear agreement with West, he also gave up Libyan missile programme to Americans but in the end for his decision for dumping dollar, Americans and French puppets of USA betrayed him, altogether destroyed Libya. That was just an example for military support for petro dollar. Being China, she won't back petro Yuan by her military neither she can bully countries such as iran, russia or Europeans and I don't think that they have such an intention. China Yuan will be a friendly currency to use, no bully, no military behind petro Yuan. And indeed a great shift for Yuan, a win win scenario for eastern countries. BRICS includes India too, it would be good for India to end US bully and it's imposed currency.

 

[Muhammed45]

Moscow wants to get rid of dollar & euro payments in oil trade with Turkey and Iran
Published time: 9 Apr, 2018 09:58Edited time: 9 Apr, 2018 13:29
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© Friso Gentsch / Global Look Press

• 1909
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Russian Energy Minister Aleksandr Novak said the country is considering an option of payments for oil in national currencies, in particular with Turkey and Iran.
According to him, both countries are interested but there is also a matter of conversion of currencies and their further use. “There is a common understanding that we need to move towards the use of national currencies in our settlements. There is a need for this, as well as the wish of the parties,”Novak said.

Iran bans use of US dollar in tradehttps://t.co/u35nzTYcNRpic.twitter.com/tG9gXweSgk

— RT (@RT_com) March 1, 2018
He explained: “This concerns both Turkey and Iran – we are considering an option of payment in national currencies with them. This requires certain adjustments in the financial, economic and banking sectors.”

Last year, the central banks of Iran and Turkey signed an agreement on using local currencies in trade. The countries aimed to improve economic links and make bilateral trade easier, as well as getting rid of the US dollar and the euro.
Tehran, which has long sought to switch to non-dollar based trade, has signed agreements with several countries. It is currently in talks with Russia on using national currencies in settlements.

Petro-coin? Russia may ditch petrodollar & use #CryptoCurrencies for oil trade - analysthttps://t.co/bJmiezYYS9

— RT (@RT_com) December 10, 2017
While meeting with Russian President Vladimir Putin in November, Iranian Supreme Leader Ali Khamenei said that the best way to beat US sanctions against the two countries was joint efforts to dump the American currency in bilateral trade. He told President Putin that by using methods such as eliminating the greenback and replacing it with national currencies in transactions between two or more parties, the sides could “isolate the Americans.”

For more stories on economy & finance visit RT's business section

 

[Muhammed45]

China warns US against ‘arrogance’ amid trade standoff
Published time: 10 Apr, 2018 14:59
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© Carlos Barria / Reuters

• 13

In his first public remarks since the beginning of the tariff dispute with the United States, the president of China has issued a veiled warning to US President Donald Trump with a promise to lower levies.
Speaking at the Boao Forum for Asia, the Chinese leader called on other countries to refrain from “seeking dominance” and “reject power politics.” He added that “arrogance... will get [you] nowhere.”

“The Cold War and zero-sum mentality looks out of place in today’s world. Arrogance or only focusing [on] one’s own interests will get nowhere. Only peaceful development and cooperation can truly bring win-win or all-win results,” said Xi Jinping.

#TradeWar diaries: #US & #China have 'STUPID TRADE – going on for years' - Trump https://t.co/Srgw6ReEz6

— RT (@RT_com) April 10, 2018
He added that China would lower import tariffs on vehicles, encourage imports, as well as strengthen the protection of intellectual property.

His remarks come as the White House claimed earlier that Beijing would back down. Trump said in a tweet on Sunday: “China will take down its trade barrier because it is the right thing to do... A deal will be made on trade.”

Trump has also denied that the US is entering a trade war with China, and claimed that the ongoing dispute would soon be water under the bridge between the two countries’ leaders.

President Xi and I will always be friends, no matter what happens with our dispute on trade. China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!

— Donald J. Trump (@realDonaldTrump) April 8, 2018
The next day, he described China’s behavior not as free or fair trade, but as “stupid trade.”

US has threatened to hit a number of Chinese goods with $60 billion in import tariffs, to which Beijing responded with a $50-billion tariff package of its own.

For more stories on economy & finance visit RT's business section

 

[Muhammed45]

The Dollar Is About To Lose Its Position As The World’s Reserve Currency - Here’s What You Need To Know
Home / Investiv Daily / All-Weather Portfolio / The Dollar Is About To Lose Its Position As The World’s Reserve Currency – Here’s What You Need To Know

March 30, 2018
The Dollar Is About To Lose Its Position As The World’s Reserve Currency – Here’s What You Need To Know
A yuan-denominated future oil contract could be an historical game changer.

A future oil contract is one where you buy a certain amount of oil for a future date. Since Monday, March 26, future contracts have started trading at the Shanghai International Energy Exchange. The Exchange is in a free trade zone which means that foreigners can trade on that market as well.




Some say it’s the end of the Petrodollar while others say it won’t be able to compete due to the ease with which the Chinese government interferes with free markets, especially one where there is a lot of speculation that you never lack in oil markets and because the Yuan is a government-controlled currency.

Nevertheless, we have to see this from a realistic investment perspective. The petrodollar won’t disappear, but if China—which is the largest global customer for oil—manages to bend the market at least a bit, the dollar will definitely see increased competition from a new and rising economy and currency. Chinese companies can now buy oil without feeling the risk of fluctuations in foreign currencies.

So, where is the game changer here? Well up until now if you wanted to buy oil, you had to have U.S. dollars, thus buy the U.S. denominated IOUs. Now, if the market slowly turns to the Yuan, there will be less demand for the dollar and thus the actual value and image of the reserve currency will slowly weaken over time.

Some have been putting fake news out that the petro-yuan will be backed by gold, but I haven’t been able to find any official source so that’s isn’t something to take as “official.”

What Happens If The Dollar Loses Its Dominance?

Given the increasing strength of the upcoming growth economies, it’s probable that the days of dollar’s absolute dominance are going to be in the rear view mirror soon.

Figure 1: Global reserve currencies. Source: Statista.




This depends on many factors and no one knows the speed at which this will develop, but if China demonstrates financial stability to the world—something the Euro hasn’t managed to do—many might renounce the dollar and shift to the Yuan. Don’t forget that the population in Asia is 4.5 billion while North America has just half a billion people and Europe around 800 million.

Oil importers wouldn’t need to look for dollars to buy oil and oil exporters wouldn’t need to buy U.S. Treasuries with their excess dollars which would lower demand for the U.S. currency and increase interest rates and inflation. This would put pressure on deficits, the budget, consumer credit, mortgages, and lower the standard of living.

What To Do From An Investing Perspective?

The dollar is so intrenched in global trading that it will take time, but if China slowly—by building the One Belt One Road initiative, investing in Saudi Arabia, and increasing the connections with Asian countries and Russia—starts to take the cake away from the dollar piece-by-piece, the long term picture isn’t bright.

You know how these things usually go, nothing happens for a long time and then it all flips in a big sharp move as people panic and rush into the new hot investment or currency where regulatory involvement follows.

Given the budged deficits and the credit economy, I’ll just continue to say what I have been saying for a long time: be diversified and prepared for everything by having exposure to great assets globally, hard assets, commodities, and a bit of precious metals.

A Note On Trade Wars & Other Wars

Ray Dalio recently published an article discussing how the trade war jitters are most probably just a bluffing strategy and how the actual trade tariffs aren’t significant on a global scale. He expects that there will be some trade agreements that look like wins for the U.S. which the markets will like, so we might see a run up in the markets.

He concluded that we are certainly in a world where the U.S. dominance is over and the world will become multipolar. He hopes that the new Trump hardline hires won’t go into wars and says that in such times: “I believe that it is especially important to keep one’s portfolio liquid (to be flexible) and diversified (to not have concentrated risks).”



http://www.investivdaily.com/the-do...reserve-currency-heres-what-you-need-to-know/

 

[Muhammed45]

Unite against USA on trade

China's clarion called to EU Agencies | 6 April 2018 9:04 PM TWEET Brussels:

China on Friday called on the European Union to take a joint stand against US protectionism as the tit-for-tat trade rift between Washington and Beijing threatened to entangle Europe. The call to Brussels came as US President Donald Trump warned that he could slap another USD 100 billion (86 billion euros) of extra tariffs on Chinas imports, fanning fresh fears of a global trade war. "China and the EU ... should take a clear stance against protectionism, jointly preserve the rules-based multilateral trade order, and keep the global economy on a sound and sustainable track," Zhang Ming, the head of the Chinese mission to the EU, said in a statement sent to AFP. Read This - Scientists restore paralysed man's sensations through brain zapping "This is a joint responsibility of China and the EU. We must act together to make that happen," Zhang said. In his statement, Zhang firmly defended multilateralism and said "the United States turns its back on these globally recognised rules and its own commitment." Read This - Russian helicopter crash in far eastern city leaves 6 dead These "protectionist moves under the pretext of national security will undermine the credibility of the WTO-centred multilateral trade system, and the rules-based global trade order," he added. The Chinese commerce ministry said on Friday it is ready to pay "any cost" in the trade spat with Washington after already announcing plans to meet earlier US threats with levies on USD 50 billion worth of major US exports such as soybeans, cars and small aircraft. The EU is caught in its own trade drama with the US, under a threat of crippling steel and aluminium tariffs by Washington. Trump last month authorised the suspension of those fresh tariffs, but only gave the EU until May 1 to come up with a solution to unfair trade practices alleged by the US leader.

http://www.millenniumpost.in/world/unite-against-usa-on-trade-chinas-clarion-called-to-eu-293086

 

[Muhammed45]

China Moves to Unite WTO Members Against US Protectionist Policy
© AP Photo/ Andy Wong
BUSINESS
05:04 04.04.2018(updated 06:16 04.04.2018)Get short URL
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BEIJING (Sputnik) - China calls on all the member states of the World Trade Organization (WTO) to take steps in cooperation with Beijing to resist the protectionist policy implemented by the United States, the permanent envoy of China to WTO said Wednesday.


Beijing (Sputnik) - China calls on all the member states of the World Trade Organization (WTO) to take steps in cooperation with Beijing to resist the protectionist policy implemented by the United States, the permanent envoy of China to WTO said Wednesday.

On Tuesday, the Office of the US Trade Representative said in a press release that the United States was set to impose additional tariffs on around 1,300 Chinese products.

"The list of proposed measures recently published by the United States is an intentional and major violation of the basic WTO principles. In the context of these wrong US steps, China is planning to resort to the WTO dispute settlement mechanism. At the same time we call on all the WTO member states to stand firm against the US trade protectionism along with China," Zhang Xiangchen said, as quoted by the press service of the Chinese Ministry of Commerce on its Weibo account.

© AP PHOTO/ TED S. WARREN
Beijing Says Ready to Give Mirror Response to New US Tariffs
Earlier, the Chinese Ministry of Commerce stated that Beijing is ready to adopt "mirror-like" measures in response to thenew US tariffs, saying that the concrete measures would be announced soon.


Recently, China officially told the World Trade Organization that it would impose $611.5 million in tariffs on $2.75 billion of US imports as a response to the US tariffs on steel and aluminium imports announced on March 23.

Meanwhile, Chinese Foreign Ministry’s spokesman Lu Kang said that Chinese authorities plan to resort to the dispute settlement mechanism of the World Trade Organization in order to find a solution to the ongoing Beijing-Washington tensionsin the sphere of trade.

"The activities of the US side have significantly violated the basic principles of theWTO. Against the backdrop of these wrong US steps, China plans to resort to the WTO dispute settlement mechanism in the near future," Lu said.

According to the spokesman, the Chinese side strongly condemns the announcement of the tariffs.

https://sputniknews.com/business/201804041063187104-china-wto-resist-usa-protectionism/

 

[Muhammed45]

Russia & China gradually ditching US dollar in favor of domestic currencies as trade booms
Published time: 12 Apr, 2018 13:38Edited time: 12 Apr, 2018 14:48
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© Thomas White / Reuters

• 593

Moscow and Beijing have been cutting the share of the US dollar in bilateral settlements, as trade between the countries rapidly grows.
China is Russia’s largest trading partner, accounting for 15 percent of Russian international trade last year. In January 2018, it grew to 17.2 percent. Germany, which holds second place among Russia’s trade partners, has a share of about eight percent.

Read more
China can succeed with petro-yuan where Gaddafi failed – killing the US dollar in oil trade
Last year, bilateral trade between Russia and China increased by 31.5 percent, reaching $87 billion. This year, it is expected to reach $100 billion, the Russian Economic Development Ministry told RT.

As trade grows, Russia and China are also promoting settlements in ruble and yuan, bypassing the US dollar and other Western currencies. “It makes it possible to reduce the dependence on the influence of third countries,”the Russian Central Bank told RT.

According to the Russian regulator, both Russian and Chinese companies are willing to pay in ruble and renminbi, and this can be proven by real numbers. Last year, nine percent of payments for supplies from Russia to China were made in rubles; Russian companies paid 15 percent of Chinese imports in the renminbi. Just three years ago, the numbers were two and nine percent, respectively.

Direct payments in the ruble-yuan pair do not imply the participation of American, British, or EU banks. This significantly reduces the control of the West from ongoing transactions, and makes the trade turnover between Russia and China independent. Moreover, such payments can be made without SWIFT through the China International Payments System (CIPS).

The Moscow Exchange also highlights the growing interest in the ruble-yuan pair. “Since the launch of trading of the currency pair in 2010, the total volume of transactions with the yuan has exceeded 2.7 trillion rubles (around $45 billion),” spokesman for the exchange Igor Marich told RT.

Marich added that more than 170 Russian banks and brokerage companies from different regions of the country are making deals with the yuan at the Moscow Exchange. China is represented by its financial giants – the Bank of China, ICBC, China Construction Bank and Agricultural Bank of China. The ruble-yuan exchange rate is calculated without the participation of the US dollar, and is based on investor demand, he said.

For more stories on economy & finance visit RT's business section
https://www.rt.com/business/423930-russia-china-dollar-trade/

 

[Muhammed45]

Russian oil producers to make money from China’s yuan-backed crude futures – analysts
Published time: 15 Apr, 2018 08:19
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Kozmino, an oil-loading sea port in Primorsky Region, the terminal point of the Eastern Siberia – Pacific Ocean pipeline. © Svetlana Majorova / Sputnik

• 79

Crude oil exports implemented via Eastern Siberia–Pacific Ocean (ESPO) oil pipeline may substantially benefit from yuan-denominated oil futures launched by China last month, according to industry experts.
If the new product manages to succeed, price pegging of the Russian ESPO export blend to the China contract will favorably influence the Russian oil blend price. The new futures contract may reportedly boost Russian producers’ annual revenues by extra $440 million.

Read more
Russia & China gradually ditching US dollar in favor of domestic currencies as trade booms
Last year, China topped the US as the biggest oil importer with nearly a million barrels of crude being purchased every day. Chinese oil demand could increase by 2.1 million barrels per day by 2023, according to Wood Mackenzie consulting firm, as quoted by TASS. The analysts stress that Chinese authorities are clearly seeking to exert more influence on oil pricing in this regard.

“Certainly, it is more beneficial for China to make settlements in the national currency. The national futures launch is a step in this direction. This instrument will make possible to form contracts on its basis and perform hedging,” Darya Kozlova from Vygon Consulting told the agency.

“At current import volumes, the contract grades could account for trade of about 200 billion yuan ($31.9 billion). This will help the Chinese government in its efforts to internationalize renminbi,” said Wood Mackenzie's research director Sushant Gupta.

The new product encourages foreign investment in Chinese assets. China’s Finance Ministry even pledged to exempt nonresidents investing into the contract from taxes for up to three years.

“However, if the government continues market interventions, while control measures over capital flow will be tightened, this will only discourage investors,” notes Ekaterina Grushevenko, an expert from the Skolkovo Business School.

Washington's latest sanctions targeting Russian business will cost German economy billions of euroshttps://t.co/iwbJbZFEiZpic.twitter.com/VnkiTKtErR

— RT (@RT_com) April 12, 2018
Analysts say that Beijing is on its way to creating its own oil benchmark as seven different blends accounting for just 20 percent of total imported volumes are currently authorized for trading.

“Creation of liquid futures is a lengthy and complex yet feasible process, as Dubai’s experience shows. A fairly liquid exchange market is an advantage for China, which is important for benchmark forming” said Kozlova.

For more stories on economy & finance visit RT's business section
https://www.rt.com/business/424192-russian-producers-benefit-china-futures/

@Torch @Adam WANG SHANGHAI MEGA @oprih @vostok @TaiShang @1ndy

Guys, Russia willingly chooses to go with Petro Yuan as it seems. Congrats to both countries, a good alternative platform is being accessible by Russia China strategic cooperation.

 

[Muhammed45]

Death by a thousand cuts: China’s yuan-priced crude benchmark chips away at petrodollar
Published time: 16 Apr, 2018 08:02Edited time: 16 Apr, 2018 11:50
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Uma Thurman as Beatrix Kiddo aka Black Mamba aka The Bride in ‘Kill Bill: Volume 1.’ © Global Look Press

• 11

China finally launched last month its yuan-denominated crude oil futures that have been in the works for years, after several delays.
The start of the new contract trading was successful, attracting interest from institutional and retail investors, and major commodity trading houses Glencore and Trafigura.

Yet, it’s too soon to call the less-than-a-month-old contract a total success, because it still faces a long road toward building reputation and history, analysts say. They have also identified the single biggest risk factor for western investors—the extent to which China could meddle with government regulation in the yuan crude futures, as Beijing is known for little tolerance toward wild price swings in its markets and has a history of intervening.

Read more
Petro-yuan to launch renminbi as global currency & kneecap petro-dollar
This is also the conclusion of China’s biggest crude oil supplier, OPEC. In its April Monthly Oil Market Report, the cartel—which accounts for close to 60 percent of China’s crude oil imports—said that “the extent to which the INE contract is independent from government interference is currently the main risk factor facing western investors, which is in addition to a currency risk, given that the INE is settled in yuan.”

According to Reuters’ John Kemp, possible Chinese intervention on the yuan crude future market could be one of the three elements that could doom the new contract. Citing the paper ‘Why Some Futures Contracts Succeed and Others Fail’, Kemp argues that the third key element to a successful futures contract—public policy should not be too adverse to futures trading—could be the stumbling block to the Chinese crude futures, while the new contract could easily meet the other two criteria for success. These are 1) a commercial need for hedging and 2) a pool of speculators must be attracted to a market.

OPEC, especially its Middle Eastern producers, will be closely watching the futures contract because once established, the Chinese reference crude price could act as a regional benchmark for negotiations of spot or term crude oil prices. The contract is made up of seven medium-sour crudes prevalent in the Chinese market—six freely traded Middle East grades (Basrah Light, Dubai, Masila, Oman, Qatar Marine, and Upper Zakum), and China’s Shengli crude.

“At this level of imports from OPEC, Middle Eastern producing nations will be watching closely as they could, in time, face pressure from their Chinese buyers to adopt this benchmark for pricing their physical crude contracts,” the cartel said in its monthly report.

Read more
No respect for elders: China's new oil benchmark crushing old-timer Brent
The fact that OPEC dedicated a special article on the Chinese yuan crude futures in its closely watched report shows that the cartel is taking seriously the possibility that at some point in the future, its Middle Eastern members may have to price the oil they sell to China versus a Chinese crude benchmark.

While the official goal of the new futures contract is to establish a regional benchmark for more useful pricing of the crude grades prevalent on the Chinese market, analysts see the yuan oil futures as a step toward China seeking wider acceptance of its currency in global trade, including the oil trade, and establishing a petro-yuan that could challenge, in the future, the dominance of the petrodollar.

China is now the biggest crude oil importer in the world, and the pace of its oil demand growth is capable of influencing the oil market and the trade in the two most traded crude futures in the world, Brent and WTI. So it makes sense for the top crude importer to want to use oil as a means to promote its own currency on international markets.

According to Dr Mohamed Ramady, an energy economist and geopolitical expert on the GCC, the launch of the yuan crude futures contract has two key rationales—politics and pragmatism. On the practical side, such a contract would better reflect the crude grades on the Chinese market that often differ from the grades underpinning the Brent and WTI benchmarks.

On the political front, “Denominating oil contracts in yuan would promote the use of China’s currency in global trade, one of the country’s key long-term goals as an alternative to the dollar – making this even more appealing to sanctions-threatened countries relying on the dollar,” Ramady wrote in The National.

Read more
China can succeed with petro-yuan where Gaddafi failed – killing the US dollar in oil trade
The yuan is still used in less than 3 percent of global trade, but the yuan crude futures contract and China’s push to assert its currency internationally “could perceptibly change in the near future and create the conditions for a respectable challenge to the US dollar,” Ramady said.

Hayden Briscoe, Head of Fixed Income, Asia Pacific, at UBS Asset Management, said in a report just before the Chinese futures launched that “We believe that in the long term this will change how oil is traded globally, create a petro-yuan currency flow, increase the role of the RMB [renminbi - Ed.]as a global trading currency, and compel investors to up their allocations to Chinese financial assets.”

In the longer term, yuan oil trading could shift the structure of the global oil market, but two things need to happen first, Briscoe said. One is that China needs to remove, or substantially reduce, capital controls. The other is that China’s oil suppliers such as Saudi Arabia, Russia, and Iran to agree to accept yuan for their oil exports to China. “This is also taking shape because Russia already accepts RMB for oil exports, as does Iran, and we expect Saudi Arabia to soon begin invoicing China in RMB,” Briscoe wrote.

The yuan crude futures launch is as much practicality as it is politics, but many analysts and OPEC itself see Chinas’ domestic capital market policies as the biggest threat to the contract’s success.

This article was originally published on Oilprice.com
https://www.rt.com/business/424233-petro-yuan-dollar-death/