Yellen's goal of asking China to increase its holdings of U.S. bonds has failed, and the intensification of the U.S. debt crisis means that the risk of dollar assets is rising?
The central bank cleared the increase in U.S. bonds**
Yellen's goal of asking China to increase its holdings of U.S. bonds has failed!
Previously, U.S. bonds faced the risk of default, and Yellen hoped that China could increase its holdings of U.S. bonds, so as to lead other countries to increase their holdings of U.S. bonds and help U.S. bonds survive the credit crisis.
However, instead of increasing its holdings, China is constantly selling off its U.S. bonds! Over the past two years,The PBOC's holdings of U.S. bonds fell by nearly 23 percent, with an unprecedented drop to more than $867 billion in central bank reserves.
And sinceSince November 2022, the People's Bank of China (PBoC) has increased its holdings for five consecutive months, and by the end of March 2023, China's ** reserves had accumulated to 66.5 million ounces, equivalent to about 50 billion yuan.
Not only central banks, but central banks around the world are buying U.S. bonds.
According to reports,As of April 2023, central banks have sold $129.1 billion in U.S. TreasuriesHolding of other US dollar bonds is also declining further.
According to the latest data,From 2020 to 2022, central banks sold off more than $800 billion in U.S. bonds
In January 2023, the total reserves of US bonds by global central banks fell further to 7$4 trillion.
Previously, the U.S. dollar and U.S. Treasury bonds, as analogous "hard currency", have been important reserve assets for central banks.
Among the reserve assets of the People's Bank of China, US dollar assets accounted for more than one-third at the peak.
However, as the Federal Reserve continues to initiate quantitative easing, it has injected a lot of liquidity into the US market while diluting the wealth of central banks.
The credibility and standing of the dollar and US debt have also been hit again and again.
U.S. Treasury yields have always been an important reference index for the "risk-free rate" of derivatives in the financial market, and U.S. bonds were once known as "risk-free assets".
And now, the Fed's continuous "water injection" has made the volatility risk of dollar bonds begin to rise, and even shake the "risk-free rate" indicator to the point of measurement.
Central banks are also reluctant to play the trick of "adding more water and more water" to the Fed.
In the Fed's balance sheet, the U.S. dollar is the Fed's "liability," while U.S. Treasuries are the "assets" included in the Fed.
Once the Fed begins to "dewater" the US market, central banks will generally increase their holdings of US Treasuries at the same time; And when the Fed stops cutting interest rates and starts raising interest rates** the excess dollar, central banks will sell US bonds to maintain their foreign exchange reserves.
Therefore, when the Fed uses monetary leverage to regulate the domestic economy of the United States,The cost is shared by central banks
Over time, central banks are reluctant to dance along with the ongoing quantitative easing in the United States.
This time, when the dollar began to flow into the market, central banks of various countries went against the norm and continued to sell US bonds and buy **.
According to the statistics of the World ** Association,In 2022, central banks around the world bought more than 1,100 tonnes**and are constantly increasing their reserves.
This behavior of central banks has not only impacted the status of the dollar in the world, but also promoted the rise of the dollar.
While**The gradual improvement of the market is also seen as one of the winds of "de-dollarization" of the world's financial markets
Why overweight**?
Back inIn 2014, the People's Bank of China (PBoC) realized that an excessively high share of US dollar assets in the central bank's reserves was detrimental to the renminbi itself.
The volatility of the US dollar index will inevitably have an impact on the RMB.
Therefore,The People's Bank of China (PBoC) began to gradually reduce the proportion of US dollar assets and diversify its reserve assets.
* It has become the primary target of overweighting.
The People's Bank of China has always been regarded as one of the largest buyers in the international market.
The rising proportion of reserves in the People's Bank of China has added another protective umbrella to the rise of the status of the RMB.
With the instability of the US dollar, countries are reducing US dollar assets and increasing their holdings**.
The United States still leads the country with more than 8,000 tons, Germany ranks second with more than 3,000 tons, and France is close behind. Although Russia has used a lot of ** reserves to resist US dollar sanctions, it still has more than 2,000 tons of ** reserves.
China, on the other hand, is gradually selling off US bonds while increasing its holdings**.
According to incomplete statistics,From 2018 to 2023, more than 3,000 tonnes** will flow into China
As we all know, "strong dollar, weak **".
Federal Reserve'sQuantitative easing has led to a downward trend in the US dollar, and a rise in the return on assets
Central banks have also sold dollar assets to buy after seeing the dollar market weaken.
The continued sell-off of US bonds by central banks has led to a declining share of the US dollar in global foreign exchange reserves.
Statistics,As of 2022, the US dollar has fallen to 58 percent of global foreign exchange reserves36%, and the euro accounted for 2047%, and the yen accounted for 551%, and the pound accounts for 459%, RMB accounted for 27%。
Previously,The U.S. dollar has consistently accounted for more than 70% of global foreign exchange reserves
And now,The share of US dollar assets in global foreign exchange reserves has been declining, falling to less than 60%.
The euro and the yen also fell, but the share of these two currencies fell at a much less spectacular rate than that of the dollar.
Under the advance layout of the People's Bank of China, the RMB is much less affected by the impact of the US dollar than other currencies.
China's strong economy also makes the United States a mischievous choice of "financial **".
Therefore, in the share of global foreign exchange reserves, the RMB is all the wayTake 2The 7% share became the fifth largest reserve currency in the world.
The proportion of foreign exchange reserves represents the proportion of a country's currency in the reserves of the world's central banks, and it also represents the acceptability of a country's currency in the world.
The growing share of RMB reserves in the global foreign exchange market not only represents an increase in the acceptance of RMB by central banks around the world, but also represents the expansion of the scope of RMB influence in the world.
With the Fed's quantitative easing and the "**ization" of dollar assets, the credibility of the dollar has been shaken in the global financial market.
And under the leadership of China, central banks around the world have sold off U.S. bondsOn the other hand, it continues to hit the international status of the dollar, and a wave of "de-dollarization" has gradually set off.
The wave of "de-dollarization".
InBefore the rise of the renminbi, the first major currency among East Asian countries was the US dollar, followed by the Japanese yen
Because the US dollar has always been the world's leading currency, whileThe Bank of Japan (BOJ) issues yen based on a medium proportion of US dollar assets in reserves.
With the rise of the renminbi, this situation is being broken.
From "cross-border RMB settlement" to "CIPS" business, the stability of RMB value has gradually been recognized by countries around the world.
After central banks experienced the volatility of US dollar assets, the diversification of central bank reserve assets has become an inevitable trend.
Among the central banks of the world, ** assets have always been one of the important reserves of central banks, and they have the same status as foreign exchange assets.
Before,Foreign exchange assets are usually exchanged for US dollars to be retained, and "US dollars + domestic assets + ** other assets" has always been the main reserve model of central banks around the world
Among them,U.S. dollar assets have always held a high percentage
However, at a time when US dollar assets are becoming more and more unstable, the rise of the renminbi has led countries to adjust the proportion of US dollar assets in central bank reserves.
Last year, the Bank of Israel reduced the proportion of dollar assets and increased the proportion of reserves in the renminbi and euros.
This is the first time since the founding of the State of Israel.
This also means that the wave of "de-dollarization" has not only set off in China, Russia, Iran and other countries, but has expanded to the Middle East.
But,This "wind" is not enough to really shake the position of the dollar in the world
Although the risk of US dollar assets is increasing, the world system led by the United States has not been broken, and the asset alliance established by the US dollar is still an indispensable part of the world economic and trade system.
Second, even in the context of a significant decline in the share of the dollar in the global foreign exchange reserve systemThe US dollar still dominates with more than 50%.
The U.S. dollar remains the world's leader in settlements.
InBehind the US dollar is the global economic and trade system supported by the national strength of the United States and some technical barriers, and the RMB is also a member of this system
In the wave of de-dollarization set off by Russia and other countries, although the RMB has risen rapidly as a substitute for the US dollar in the settlement system of these countries, occupying the "ecological space" of the US dollar, but,There is still a long way to go before "de-dollarization" or "multipolarization of currencies" is achieved.
The continued success of the renminbi in US bonds is undoubtedly a major blow to US dollar assets and has set off a wave of "de-dollarization".