De-Dollarization: 40% of Foreign Transactions Now in the Chinese Yuan
The de-dollarization agenda is advancing as China’s central bank has asked lenders to raise their share of Chinese yuan while facilitating cross-border trade. The People’s Bank of China increased the floor ratio for Chinese yuan-denominated trade transactions from 25% to 40%. That’s a 15% increase in settling overseas trade and transactions in the recent realignment to benefit its local currency. Also Read: Russia’s New Economic Bank Fuels Global De-Dollarization Surge De-Dollarization: China to Punish Banks That Fail to Meet the 40% Chinese Yuan Criteria Source: iStock China is taking de-dollarization seriously and is cracking the whip on banks that fail to meet the 40% Chinese yuan criteria. The increase from 25% to 40% is dubbed the Macro Prudential Assessment and banks failing to meet the criteria will receive a lower score in regulatory review, said officials close to the matter to Bloomberg. Getting a low score would also affect the bank’s future business e...