Kazakhstan Goes for RMB While on the Road to De-dollarization

[TaiShang]

Kazakhstan Goes for RMB While on the Road to De-dollarization

Central Asia's largest crude oil exporter, Kazakhstan, on August 20 surprised the market by announcing that it will start to free float its tenge effective immediately. The currency plunged 30% after the decision, with the tenge's exchange rate falling from 196 per dollar to 255 per dollar.

It is believed that the move is part of Kazakhstan’s de-dollarization strategy, which the country had vowed to implement since 2014.

Meanwhile, the de-dollarization policy will further turn Renminbi into a commonly used currency in Kazakhstan. Since September last year, the Bank of China has launched direct trading of Renminbi and tenge in Kazakhstan.

In December, 2014, a currency swap agreement has been signed between the country and Central Bank.
At the same time, Sino-Kazakhstan settlements are no longer limited to boarder trade but expanded to general trade.

Kazakhstan Goes for RMB While on the Road to De-dollarization - People's Daily Online

 

[ahojunk]

The train has started rolling toward de-dollarization and is gathering momentum.

Russia is selling its energy resources and accepting RMB. Now, it's Kazakhstan's turn. I think there are other countries too.

China and Russia is boosting its gold bullion reserve.

We already have the AIIB and BRICS NDB.

 

[TaiShang]

The train has started rolling toward de-dollarization and is gathering momentum.

Russia is selling its energy resources and accepting RMB. Now, it's Kazakhstan's turn. I think there are other countries too.

China and Russia is boosting its gold bullion reserve.

We already have the AIIB and BRICS NDB.

To ensure de-dollarization, the first target area needs to be hydrocarbon and other minerals. What ensures USD supremacy is largely thanks to oil. Hence, it must be first the oil to be de-dollarized. This is exactly what China and Russia have been doing.

 

[ahojunk]

To ensure de-dollarization, the first target area needs to be hydrocarbon and other minerals. What ensures USD supremacy is largely thanks to oil. Hence, it must be first the oil to be de-dollarized. This is exactly what China and Russia have been doing.

Totally agree. The days of the so-called petro-dollar is numbered.

It will be the nail in the coffin when Saudi Arabia starts to accept payments in RMB.

Could happen sooner than we think as China is the biggest consumer of Saudi oil.

 

[XiangLong]

The train has started rolling toward de-dollarization and is gathering momentum.

Russia is selling its energy resources and accepting RMB. Now, it's Kazakhstan's turn. I think there are other countries too.

China and Russia is boosting its gold bullion reserve.

We already have the AIIB and BRICS NDB.

We should be, by steadily gaining strenght by numbers! Countries which already have exceptionally deep trade relations with China, like Zimbabwe, Sudan, Angola and Mongolia, could option to trade in RMBs exclussively altogether. Especially Africa seems like an especially interesting option to start efforts to introduce the RMB. The RMB gives these nations the options they need to be less dependent on the Euro and Dollar. It will also give them, A LOT which already face western economic sanctions, the leverage and moving space they need to maintain their local economies.

 

[Shotgunner51]

To ensure de-dollarization, the first target area needs to be hydrocarbon and other minerals. What ensures USD supremacy is largely thanks to oil. Hence, it must be first the oil to be de-dollarized. This is exactly what China and Russia have been doing.

Well said bro. China has been taking careful steps to use trade clout as a primary tool to promote de-dollarization, hence at this stage most actions are revolved around major trade partners, doing bilateral deals one-by-one. China's massive trade volumes across almost all commodities, gold included, and a full spectrum of industrial capabilities, should facilitate the process.

To complete the recycle of RMB, next phase will be liberalizing free exchange of RMB under capital accounts. To get this done, many homework preparations are underway, just gonna take a bit more time.

Back to topic, wish Sino-Kazakhstan trade prosper!

 

[XiangLong]

To ensure de-dollarization, the first target area needs to be hydrocarbon and other minerals. What ensures USD supremacy is largely thanks to oil. Hence, it must be first the oil to be de-dollarized. This is exactly what China and Russia have been doing.

Fossil fuels will remain viable till somewhere 2030-2050 when oil and gas supplies will start to deplete. What we should focus on as well, is what will come next, and that might just going to be battery and chip technology.

In this case, rare earth metals like Lithium, Iridium, Erbium, Lanthanum, Europium, Cerium and Neodymium will once again come into play despite the previous rare metal brawl a few years back. China already has a good deal of these metals in reserves in its own grounds, but it won't hurt to keep stockpiling them for applications now, and the foreseeable future.

 

[cirr]

Totally agree. The days of the so-called petro-dollar is numbered.

It will be the nail in the coffin when Saudi Arabia starts to accept payments in RMB.

Could happen sooner than we think as China is the biggest consumer of Saudi oil.

Don't forget Iran and Venezuela，the latter actually has the world‘s largest oil reserve。

 

[Shotgunner51]

Fossil fuels will remain viable till somewhere 2030-2050 when oil and gas supplies will start to deplete. What we should focus on as well, is what will come next, and that might just going to be battery and chip technology.

In this case, rare earth metals like Lithium, Iridium, Erbium, Lanthanum, Europium, Cerium and Neodymium will once again come into play despite the previous rare metal brawl a few years back. China already has a good deal of these metals in reserves in its own grounds, but it won't hurt to keep stockpiling them for applications now, and the foreseeable future.

Excellent view for bringing metals/materials into the picture!

 

[somsak]

Why do I need RMB instead of dollar?
For me, thr one that gives a cheaper commodity. I mean, if I have 100 Thai Baht, and I want some oil. I will choose to trade oil in currency, RMB or Dollar , which ever get me the most amont of oil.

Suppose other people choosing the sake decision, RMB could be a de dollarization if they could provide a much cheaper oil. How can oil be traded cheaper? They are cheaper by pipeline transportation, when compare to today standard oil tankers. Thats where one belt one road fit onto the chess board.