British Media Rmb Internationalization Tends To Stagnate
According to British "Financial Times", Robert Cookson replica soccer jerseys, US-China Economic and Security Review Commission in the annual report submitted this month to Congress warned that in the next five to 10 years RMB may be a threat to the dominant position of the dollar on the international stage.
However, according to the latest data, this prediction may be too premature. In contrast with the mainstream view Czech Republic Soccer Jersey, evidence from China indicated that the internationalization of RMB is becoming stagnant - in many ways, internationalization of the RMB has just begun.
People's Bank of China revealed in the latest monetary policy report that in the third quarter, the total cross-border trade in RMB has dropped slightly, which is the first decline of the data from June 2009, when China launched relevant pilot projects.
"This is quite surprising, because the momentum has been good before." Said Dariusz Kowalczyk, the Hong Kong strategist in theCrdit Agricole said, "how long it will take the Yuan to become an international currency depends on the degree of its acceptance in the trade."
Trade is also a major source of liquidity of RMB on the international market, so the slowdown of the trade settlement business of RMB may affect the overseas assets (such as "dim sum bonds" issued in Hong Kong and which is RMB-denominated) price. According to central bank data released, in the third quarter, the total cross-border trade in RMB reached 583 billion Yuan (92 billion U.S. dollars), going down by 2% sequentially and this trend of keeping increasing all the way up in the past two years has been broken. According to data from the French bank Credit Agricole, the share of trade settlement transactions of Yuan in China's current trade has decreased from 8.5% in the second quarter to 7.8%.
As what has been first reported by the British "Financial Times" in January cheap jerseys, one of the main reasons for the booming of the Yuan trade settlement is that many companies in mainland China have been in transactions with their subsidiary companies in Hong Kong in order to make profits between the two sets of market. The insiders of Banking said in the third quarter arbitrage activity has decreased, leading to decline in the Yuan trade settlemen. Bankers described a major arbitrage means: first soccer team jerseys, a Chinese company in a Mainland deposited a sum of money, getting 3.5% interest. Then, the company received a letter of credit settled in Renminbi from the bank, and on the surface it is used to pay for the debt of the subsidiary companies in Hong Kong.
However, concerned about their exposure in the Mainland, Hong Kong banks are increasingly reluctant to issue loans to mainland customers holding letters of credit. At the same time, Hong Kong Monetary Authority has also increased the fight against "illegal" payment in Yuan. RMB eventually may be able to compete with the dollar, but before multinational corporations and opportunistic Chinese mainland companies open arms to the Yuan, the political strategy makers of the United States can basically sit back and relax.
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