- Analytics
- News and Tools
- Market News
- The world does not like the Renminbi – Commerzbank
The world does not like the Renminbi – Commerzbank
It seems like an eternity has passed since Chinese policy was intent on turning the Renminbi into a global trade currency. Economists at Commerzbank explain why RMB is set to depreciate against the US Dollar.
The remnants of past policies are damaging the Renminbi
With a share of 2.7% in cross-border SWIFT capital transactions the renminbi has no significant international role. And that despite the fact that no other economy undertakes as much foreign trade as China. We have to conclude: the world does not like the Renminbi.
Some remnants of past efforts are still in place. For example, the swap lines China had entered with other countries. If the Renminbi had turned into a world currency and if loans had been denominated in RMB in third countries, these swap lines would have been able to prevent a dramatic collapse of these markets in times of crisis. None of that ever happened.
Now these swap lines are diverted for another use. In Argentina for example to provide the government with a loan that only has to be secured with an internationally largely worthless Argentinian Pesos. However, that is not CNY-positive.
The Argentinian government is not going to be able to do much with the Yuans it received in this deal. It needs a currency with which to pay for urgently required imports: the Dollar. So the whole deal will mainly result in one thing: it will cause the Renminbi to depreciate against the US Dollar.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
