The People’s Bank of China central bank has now established at least 41 non-dollar swap lines providing other nations with yuan/renminbi, and the use of them rose by 20% in the first quarter of 2023, to $16 billion equivalent, according to a Bloomberg News report on June 6. The increase in usage since the beginning of 2022 is 115%. InvestorsObserver platform reported on May 31 that “The sudden surge in RMB [renminbi] demand is a strong indicator of the urgency of governments the world over to shift away from the dollar.” The small risk of renminbi fluctuations during the term of the swap line is nothing compared to the risk posed by U.S. sanctions policy. Interestingly, InvestorsObserver also says, “The aggressive Fed policy has not been successful in dissuading an accelerating shift to the RMB,” especially in China’s own cross-border trade settlements. This real motivation for the Fed rapid and sharp rate increases, needs to be understood more widely than it is.
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China Is Providing Many ‘Swap’ Credit Lines for Non-Dollar Trade Settlement
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