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Full Version: De-Dollarization Begins – China Stockpiling Gold & Offers Discount To India Businesse
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[Image: US-Dollar-and-China-Yuan-Head-Figure.jpg]

Beijing knew it could not make “Yuan” (Renminbi) an internationalized currency overnight, nor could it replace the U.S. dollar’s dominance in the global system with the Chinese currency. China has US$3.0549 trillion in foreign exchange reserves (end of August) – the largest in the world. About a third – US$1 trillion – of its foreign reserves are in U.S. Treasuries.

China is the second-largest foreign holder of US government debt, after Japan. However, Treasury department data showed that the Chinese government has slashed holdings of U.S. Treasuries for a seventh consecutive month in June. China’s stash of U.S. debt dropped to US$967.8 billion in June, the lowest since May 2010 when it held US$843.7 billion.
 
Interestingly, last week, China’s central bank – People’s Bank of China – has asked major state-run banks to get prepared to sell dollars and stock up yuan. On paper, it appears to be efforts to arrest Yuan’s depreciation against the greenback. After all, the Chinese currency has lost close to 12% against the dollar so far this year, thanks to aggressive interest rate hikes by the U.S. Federal Reserve.

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