![]() ![]() This had negative consequences for residents of almost any country that borrows in dollars, pays for imports in dollars, or buys wheat, oil or other commodities priced in dollars, as these transactions became more expensive.Īfter Russia invaded Ukraine in early 2022, the U.S. dollar appreciated significantly against most other currencies in 2022 as the Federal Reserve hiked interest rates. and potentially hurts emerging markets is not new. dollar has reigned supreme as the dominant global currency for decades – and concern about how that benefits the U.S. Alexander Astafyev/Sputnik/AFP US dollar’s dominance questioned Russian Prime Minister Mikhail Mishustin meets with Chinese President Xi Jinping in Beijing on May 24, 2023, with the two countries signing a new set of trade agreements. The yuan also constituted less than 3% of the world foreign exchange reserves at the end of 2022, compared with 58% for the dollar and 20% for the euro. dollar, with little trading against other currencies.Īnd when it comes to global payments, the actual share of the yuan is a mere 2.3%, compared with 42.7% for the dollar and 31.7% for the euro. Moreover, almost all trading was against the U.S. The yuan’s average trading volume is still less than a 10th of the U.S. The yuan is also the fifth-most-actively used currency for global payments as of April 2023, up from 30th place in early 2011. That is a phenomenal rise from its 35th place in 2001. ![]() ![]() Thanks to these efforts, the yuan is now the fifth-most-traded currency in the world. Even the trading hours for the yuan were recently extended on the mainland. And China is developing a digital yuan as one of the world’s first central bank digital currencies. Three years later, in 2018, it launched the world’s first yuan-denominated crude oil futures contracts to allow exporters to sell oil in yuan.Ĭhina has also emerged perhaps as the world’s largest creditor, with the government and state-controlled enterprises extending loans to dozens of developing countries. China has long wanted to make the yuan a global force and has mounted significant efforts to do so in recent years.įor example, the Chinese government launched the Cross-Border Interbank Payments System, or CIPS, in 2015 to facilitate cross-border payments in yuan. ![]()
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