The yuan fell by 700 points! Russia's proposal to replace SWIFT has aroused heated discussions on China's attitude.
In the past seven trading days, the yuan has gained another 700 points.
How long can the dollar be strong?
The Central Bank of Russia launched a strong counterattack against the dollar, announcing that it would work with other BRICS countries to replace the dollar-dominated SWIFT settlement system.
How has China responded?
After 9:30 p.m. yesterday evening, the offshore exchange rate of the yuan against the US dollar suddenly appeared in a wave**, falling below 720 integer mark, and finally closed at 72159。
The offshore exchange rate of the renminbi against the US dollar reached 7The highest point of 1415, more than 700 points compared to seven trading days ago.
Obviously, this has a lot to do with the fact that the dollar is deliberately kept at a high level of interest rates.
This is despite the fact that the US core PCE index fell to 29%, but the Fed decided at its last meeting to refuse to cut interest rates. As a result, the US federal interest rate continues to hold at 525% to 5A high level of 5%, which is exactly the same as when interest rates were stopped in 2006.
Because of this, the U.S. dollar index has been back around 104 points for the past five weeks.
Powell seems to want to keep the dollar strong by keeping interest rates high.
However, the strength of the dollar will not be sustained for long, and more and more countries are trying to de-dollarize.
Russia's central bank recently said hawkishly that it will discuss (perhaps soon) the introduction of a new financial information transmission system with other BRICS countries, and that more and more countries will abandon the use of dollar-based SWIFT in the future.
Last year, Iran led the multi-state Asian Clearing Union to create its own settlement system to replace SWIFT, but this can only be considered an attempt due to the small influence of the Asian Clearing Union.
Russia's proposal for a rotating BRICS presidency in 2024 now has a very different meaning.
Earlier this year, five countries confirmed their acceptance of invitations to join the BRICS. At the same time, South Africa's *** noted that written applications have been received from another 34 countries wishing to join the BRICS.
This in itself shows the growing influence of the BRICS countries.
Excluding the five new members, the original five members of the BRICS represent 26% of the world's land area and 42% of the world's population.
Russia** also made calculations based on data from the International Monetary Organization, which concluded that if purchasing power parity was used, the current GDP of the BRICS countries already surpassed that of the G7 and accounted for 36% of the world.
So we can imagine that when the BRICS introduces a new settlement system and uses it in the current BRICS member states as well as candidate countries, it will have a huge impact on SWIFT.
Now, the head of the Central Bank of Russia has begun negotiations with other friendly countries on the launch of cross-border settlements of digital currencies, adding that interoperability with similar platforms in other countries will be considered in advance.
Some analysts believe that Russia already has the best interoperability in mind, most likely the RMB CIPS system, which has been in operation since 2015.
Whether this happens, the renminbi will undoubtedly have the best opportunity in the process of global de-dollarization, especially as the BRICS group prepares to establish a new settlement system.
In this regard, China's spokesman also made it clear that he supported it, because emerging markets have promoted the optimization of international settlement methods, which is not only conducive to the investment of both sides, but also conducive to maintaining the stability of international finance.