The de-dollarization strategy you followed China And the Russia It constitutes a major change in the international financial landscape. This movement aims to reduce its dependence on the US dollar, and is a direct reaction to geopolitical tensions, such as Western sanctions against Russia after its invasion of Ukraine, and trade conflicts between China and the United States. United State.
By encouraging the use of their currencies in trade and foreign exchange reserves, these two superpowers seek to establish greater economic independence.
This de-dollarization initiative is also an attempt to reshape the global economic system, favoring a multipolar system where different currencies play more important roles. This represents an important step towards a more diversified balance of economic forces globally, reducing the supremacy of the US dollar.
China is working to increase its initiatives
The business relationship between China And the Pakistan It has recently witnessed significant development, marked by a significant increase in the use of the Chinese Yuan (RMB) in binary transactions. In 2023, the trade volume between the two countries in Renminbi reached more than 14%, compared to only 2% in 2018. This information was revealed by senior officials of the State Bank of Pakistan (SBP) during a meeting with the Private Investment Facilitation Authority. The UN Security Council (SIFC) emphasizes a deliberate strategy to deepen China-Pakistan economic relations.
In this context, the SBP has taken concrete steps to facilitate this transformation by appointing three banks – Industrial and Commercial Bank of China (ICBC), Bank of China (BOC), and Standard Chartered Bank (SCB) – to establish local centres. RMB clearing and settlement systems. The move comes as part of a broader strategy to ease pressure on Pakistan's balance of payments and stabilize its foreign currency reserves, most of which are in US dollars.
A senior official who attended the SIFC meeting on January 3 stressed that the increase in renminbi trading was a result of the memorandum of understanding signed between the People's Bank of China (PBC) and the Central Bank of China, which allowed the Industrial and Commercial Bank of China to act as a clearinghouse for the renminbi. Bank in Pakistan. This shift towards the renminbi in business transactions is not only important for Pakistan but is also a global trend.
According to NIKKEI Asia, the Chinese yuan has become the fourth most used currency in global settlements. In November, it surpassed the Japanese yen in international payments for the first time since January 2022, international payments service SWIFT reported. Global use of the yuan in trade in November reached 4.61%, the highest level since data collection began in 2015.
This increase is partly due to China's desire to use currencies other than the US dollar in its trade with countries such as Russia, the Middle East and South America, especially after Western sanctions imposed on Russia due to its invasion of Ukraine. In Pakistan, the increasing use of the Chinese currency is also evident in its trade with Russia, especially in fuel transactions, highlighting the yuan's rise in international trade.
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