Officers count US$100 bills at a money exchange service, Melawai, Jakarta, Wednesday (28/9/2022). The rupiah exchange rate penetrated IDR 15,236 per US dollar at 10.41 WIB on Wednesday trading (28/9/2022). (Liputan6.com/Johan Tallo)
The following is a list of countries interested in using Yuan:
1. Russia
Russia’s economy has been badly damaged by Western sanctions as a result of its invasion of Ukraine, forcing Moscow to adopt a wider use of the Yuan as Washington-led restrictions have limited its access to US dollars.
As a result, Russia chose the Yuan significantly following a wave of financial sanctions that saw nearly half of its foreign currency reserves frozen and major Russian banks removed from the Swift interbank messaging service, which facilitates international payments.
Rory Green, the chief China economist of London-based TS Lombard Research Firm, estimates that the use of the Yuan in Russia jumped from less than 0.26 percent in 2020 to 2.57 percent in January 2023. This makes Moscow a global foreign exchange trading player. the fifth largest after Hong Kong, England, Singapore and the United States.
2. Saudi Arabia
Reports in March indicated that Saudi Arabia was considering accepting Yuan instead of US dollars for oil sales. This came after President Xi Jinping said during a visit to Saudi Arabia in December that there must be a new paradigm for energy cooperation, and he called for increased the yuan’s role as the trading currency for oil and gas.
It is projected that the demand for US dollars will probably be eroded if the plan is implemented. Remember, Saudi Aramco’s contract with a Chinese company related to oil sales is worth USD 10 billion.
3. Argentina
The Argentine government said in late April 2023 that it would start paying for Chinese imports in Yuan rather than US dollars. Economy Minister Sergio Massa confirmed that Argentina, after meeting with Chinese ambassador Zou Xiaoli and companies from various sectors.
It said Argentina used yuan to pay for $1.04 billion worth of Chinese imports in April, not US dollars. Then Argentina targets goods worth USD 790 million per month starting in May to also use Yuan.
4. Brazil
Brazil has started accepting trade and investment settlements in Yuan, as a result of an agreement reached between central banks in February 2023. Brazil has also made appointments for yuan clearing banks and access to the Cross-border Interbank Payment System, China’s equivalent to the international financial messaging service Fast , in early April 2023 .
Brazilian yuan-denominated foreign exchange assets reached a high of 5.37 percent of the total at the end of 2022. This achievement surpassed euro assets to become the second largest.
5. Bangladesh
Bangladesh and Russia agreed to use Yuan to settle payments for a nuclear plant Moscow is building in the South Asian country, a Bangladeshi government official was quoted as saying in April.
Initially Russia wanted payments to be made in rubles. But this condition is not possible to apply Bangladesh.
“But it is not possible for us”, said Uttam Kumar Karmaker, a senior official at Bangladesh’s Finance Ministry, according to Reuters.
Dhaka cannot pay Moscow using US dollars after Russia was barred from accessing the Swift international money transfer system last year. Transactions will be settled in yuan via the Cross-Border Interbank Payment System, developed by China in 2015.
Infographic Difference between 1998 and 2018 Rupiah against the US Dollar. (Liputan6.com/Triyasni)
Tags: Dedollarization issue fact dollar strong
