MAR 26, 2018
It’s official. The petro-yuan is now a viable competitor to the petrodollar, and just as trading is picking up, seeing oil hit new multi-year highs.
This is the fruition of years of preparation, in lockstep with significant increases in gold reserves, for both China and Russia as they seek to unseat the USD as the world’s de facto trade currency.
The petro-yuan launch is seen as a blow to the US dollar that has been weakening in recent months. The US dollar is the predominant settlement currency for oil futures contracts. On Monday, the greenback slipped to a 16-month low against the Japanese yen.
Chinese authorities have reportedly accelerated the launch amid growing crude imports. Last year, the country outpaced the US as the world’s number one importer of oil. Thus, the contracts may not only help to win some control over pricing from the major international benchmarks, but also promote the use of Chinese currency in global trade.
The greenback will get weaker, as soon as other nations have a real credible alternative to it, Ann Lee, Adjunct Professor of Economics and Finance at New York University and author of the book ‘What the US Can Learn From China’, told RT.
“It is more of a game changer for the US. As soon as other nations have a real credible alternative to the US dollar, they can dump dollars and switch to the yuan which can spark a dollar crisis. If that happens, not only will there be inflation from the tariffs, but also from the flood of dollars,” said Lee.
ORIGINAL SOURCE: Death of US dollar? China launches petro-yuan to challenge greenback’s dominance at RT on 3/26/18