Dollar no longer primary oil currency as China begins to sell oil using Yuan

China is slowly but surely becoming one of the major global currency. With the recent Yen-Yuan currency agreement (see more: OANDA’s Infographic), China now has direct currency exchange with the 3rd largest GDP in the world (US and China are 1st and 2nd respectively). Furthermore, a few developing/emerging markets such as Chile, Venezuela and Vietnam are adopting Renminbi as their reserve currency. This will increase the importance of Yuan in global economics and trade.

However, again the title is misleading because Dollar is still the primary currency in which Oil will be traded in. A more apt title could be “Dollar no longer ONLY oil currency”. Yuan is not slated to take over immediately or even in the near future as the article itself alluded to the fact that:

Since China is not a natural oil producing nation, the question most people will ask is how will the Asian economic power get enough oil to affect dollar hegemony?

Regardless, this development cannot be ignored, as the Yuan is indeed gaining ground against the USD in global relevance. However, every single day that the Yuan remains as a restricted currency, it is one more day delayed for true dominance of the Chinese Yuan.

Via – Examiner

 

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