Internationalization of the Yuan: China attacks the international supremacy of the US dollar

So far, China attempted to reduce the dollar’s role in bilateral trading in the Asian region and South America, but its latest steps show that Europe is the next target.

For the first time ever, Chinese monetary authorities have signed a bilateral swap agreement with France. 

The most surprising aspect of the signed agreement is that the initiative of the swap came from the French central bank. Most observers were surprised by the fact that a European central bank is willing to help China in its quest to internationalize the Yuan at the expense of the US dollar.

China Daily reports that The Bank of France has been working on ways to develop a RMB liquidity safety net in the euro area with due consideration of a supporting currency swap agreement with the People's Bank of China.

The swap agreements allow the central banks of the two countries to borrow each other’s currency and provide sufficient liquidity for the companies wishing to buy the Chinese or European currency without first buying the US dollars. Under normal circumstances such a trade is either impossible or very expensive, forcing the European importers to use the American currency, but the establishment of the swap lines aims to remove the hurdles for direct currency exchange.

The US opposes the internationalization of the Yuan, but it has no means of stopping the process. It is only a matter of time until the dollar’s supremacy will come to an end.

Voice of Russia

Strategic Culture Foundation
http://www.strategic-culture.org/news/2013/04/17/china-attacks-the-international-supremacy-of-the-us-dollar.html