News
News
This country refuses to pay RMB! Results...
Dec 05,2023
Since last year, many countries in the world have gradually openedThe "de-dollarization" road.Among them, Russia, which has been severely sanctioned, is facing the challenge of de-dollarization.
India refuses to use RMB for settlement”slightly drunk
Currently, Russia'sThe road to "de-dollarization" is not smooth. Russia, which has been actively circumventing sanctions and using its own currency for trade to prop up its economy, has not found a truly viable alternative currency for trade-highlightingThe problems and risks facing countries seeking to abandon the dollar.
Before the outbreak of the Russian-Ukrainian war, most of the Russian oil went to Europe. Now,India and China have become its biggest buyers.
In order to be able to buy Russian oil, India insisted on settling transactions in rupees earlier this year.That's because using the dollar could expose it to secondary sanctions.
But the rupee is regulated by the Indian authorities and the currency is not fully convertible, meaning it cannot be easily converted into another currency. This poses a problem for Russia.
it is reported that,Russia had billions of rupees deposited in Indian banks earlier this year, and India encouraged the rupees to be spent on its own to solve the settlement problem.However, Russia has reservations about large-scale investment in India, which makes the negotiations more complicated.
Just like the original"Xiaomi mobile phone incident", you have made a lot of money in India. It is impossible to take it away. You must spend it here.But the problem is that Russia doesn't want to buy much from India.
Although the yuan is also regulated and not fully convertible, Russia imports more goods from China, including cars, machinery and other goods.
To solve the rupee puzzle and reduce currency risk,Russia has been urging Indian buyers to pay in yuan.However, due to geopolitical competition, India is increasingly uneasy about RMB trade.
Why India Refuses to Use RMB”slightly drunk
In fact, India's refusal to use RMB for settlement involves the delicate relationship between India, the United States and Russia.
After the outbreak of the Russian-Ukrainian conflict, the United States has repeatedly stated that it prohibits any country from cooperating with Russia in energy. However, India still chose to trade oil with Russia.
Although the United States cannot completely stop India's cooperation with Russia, India also understands that too radical behavior may cause dissatisfaction with the United States. Therefore,Choosing to refuse to use RMB settlement seems to be taking into account the position of the United States and its own interests.
In addition to geopolitical competition, there are other reasons, such as China'sThe status of "world manufacturing power" has been rejected by India, Vietnam, etc., and actively supports local manufacturing,India is keen to get rid of the opposition as soon as possible.The dependence of "Made in China" has even replaced China's status as a manufacturing power in the world.
3 India chose to back down”slightly drunk
India also proposed to use the UAE dirham for settlement, but it was rejected by Russia. Russia insisted on using RMB for settlement, which led to a deadlock in the negotiations between the two sides.
China, India and Russia have the intention to strengthen cooperation in recent years, and the oil transaction dispute can also be seen as an attempt of cooperation between the three countries in the economic field.
However, this choice is not without cost. The choice of non-US dollar settlement means that India needs to pay additional currency exchange costs, and also needs to take into account the fluctuation of the RMB exchange rate.
For Russia, insisting on using RMB settlement also means that it needs to bear certain currency risks.
Why did India choose to back down?
This is actually related to the economic situation in India in recent years.India wants a steady supply of oil to support its economy.The dispute with Russia is obviously not conducive to economic cooperation between the two countries.
So India chose to back down. However, Russia did not accept India's proposal.
This also reflects the confidence of Russia in this transaction.As a major oil exporter, Russia has enough chips to choose the settlement method that it thinks is most advantageous.
It is worth noting that China's central bank website recently released a statement. the statement shows that,People's Bank of China renews Renminbi with UAE central bank/Dirham Bilateral local currency swap agreement in the amount of RMB 35 billion with a term of 5 years.
This move not only provides great convenience for the trade between the two countries, but also helps to promote the economic development of the two countries and inject new impetus into the global currency diversity.
Before that,The People's Bank of China and the Saudi Central Bank have also reached a local currency swap agreement in the amount50 billion RMB, valid for 3 yearsAfter the expiration of the period, it can also be extended on a case-by-case basis.
Saudi Arabia and the United Arab Emirates have successively signed local currency swap agreements with China:First, the relationship between China and Middle Eastern countries is getting closer and closer; second,"Dedollarization" is imperative.
In fact, not only the Middle East countries, Brazilian President Lula has publicly to South America11 countries proposed, united,Abandon the dollar and create a common currency to compete with it.
Make global trade unimpeded
Contact Phone
Contact Us
Copyright ©Guangzhou Hongdex International Logistics Co.,Ltd
Hotline: 020-84608598
Whatsapp: 18027165010
QQ：2853396538
Email: 2853396545@qq.com
We will provide you with timely feedback
