Soon on top of the pile?
How The Chinese Yuan Is Threatening The Dollar's Hegemony -- Marie Charrel, World Crunch
PARIS — Will the yuan dethrone the dollar one day?
The Chinese currency may have just moved a step further in that direction with the October 10 signature between the European Central Bank and the People's Bank of China (the country's central bank) for the establishment of a "currency swap" mechanism.
The terms of the deal are a bit technical but the goal is simple: facilitating commercial exchanges between the Eurozone and China by giving European banks access to 350 billion yuan (42.4 bllion euros) or "RMD" and giving Chinese banks access to 45 billion euros. The banks will be able to make these sums available to their clients.
"It is the third-largest arrangement of its kind" signed by the People's Bank of China, declared Europlace, an organization promoting the Paris financial marketplace in an enthusiastic statement.
Most of all, this "swap line" shows the willingness of Chinese authorities to internationalize their currency. "Their dream is to see the yuan become as important as the dollar in international exchanges," says Philippe Waechter, economist for Natixis Asset Management. "And they will do whatever they can to succeed."
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My Comment: The Chinese will probably succeed in establishing the yuan as an alternative to the U.S. greenback .... helped by the fact that the U.S. is making this possible with unsustainable spending.
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