from Zero Hedge
The world’s push towards de-dollarization continues to accelerate as Americans go about their daily lives worrying more about blasphemous comedians, participation trophies, and Kim and Kanye’s traitorous behavior.
From yuan-denominated oil futures (and soon to be yuan-denominated metals contracts) to Europe’s decision to use Yuan to pay for Iranian oil; and from non-dollar settlement systems for Russia/Chinese trade to Turkey’s call for citizens to dump the dollar, it appears each action of the Trump administration deepens the distrust in the dollar hegemony, coalescing the world against Washington’s reserve currency unipolar order.
All of which leads to this…
In a well-placed interview in China’s Xinhua news – the official press agency of the People’s Republic of China – officials from Africa are seen calling for more yuanification of the massive continent’s economies.
There has been a general consensus among some eastern and southern African countries that there should be more usage of the Chinese yuan in the region because of China’s growing influence in business and trade, a financial expert said Thursday.
Executive director of the Macroeconomic and Financial Management Institute of Eastern and Southern Africa (MEFMI) Caleb Fundanga said a forum for financial experts earlier in the week had agreed that there was need to use the Chinese yuan as a reserve currency because China was playing an active role in their economies.
The forum was attended by deputy central bank governors and deputy permanent secretaries of finance from 14 countries that fall under MEFMI.
“The general conclusion is that we should use the yuan more because its time has come. We are doing more business (with China) so it’s natural that we use the currency of the country with which we are trading.
“Just the way we have been using the (U.S.) dollar and the Euro, we want to use the Chinese currency more in our transactions because it is to our benefit,” he said.
He said use of the yuan could protect the region from currency volatilities.
The forum had also discussed the implications of using the Chinese currency and agreed that there was need for more information on markets and products on which it could be invested.
“At the moment that information is not freely available,” he said, suggesting further that Chinese financial experts should make the information available at such fora.
Fundanga said the coming in of the yuan would give the region more options for managing its reserves.
The use of the yuan also came in handy because China was giving loans to the region and other African countries.
“One of the issues we discussed though was that sometimes if you have borrowed from China they want to bill you in U.S. dollars. Now we are saying our government must start discussing with Chinese enterprises (and) government so that we’re billed in yuan and then we can pay in yuan. Because there is no point if we start keeping our reserves in yuan but we’re billed in dollars. It is no good,” he said.
He acknowledged, however, that some countries were already being billed in yuan for Chinese goods and services.
Fundanga said there was also discussion on possible currency swaps like what China had done with Nigeria, where Nigerians travelling to China could easily access the yuan from their local banks.
MEFMI argues that the bulk of reserves for most countries in the region are invested in U.S. dollars, yet their composition has not kept pace with the large shifts in the world economy. This is particularly so since China and India continue to shape global economic trends as they remain major trade partners for the region.
MEFMI countries comprise Angola, Botswana, Burundi, Kenya, Lesotho, Malawi, Mozambique, Namibia, Rwanda, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.
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Bear in mind that we began to warn of China’s growing ‘colonization’ of Africa back in 2010, noted China’s increasing militarization of Africa in 2015, and recent warnings from US Generals that China and US are “on a collision course in Africa,” it appears President Trump’s “old friend” Xi is quietly making massive moves against the prevailing status quo.
Is the tide turning on the USDollar’s reserve status? Remember, nothing lasts forever
Even The World Bank’s former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.
“The dominance of the greenback is the root cause of global financial and economic crises,” Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. “The solution to this is to replace the national currency with a global currency.”