On April 6th, “The renminbi (6.8808, 0.0009, 0.01%) replaced the U.S. dollar for the first time and became the largest foreign currency in Russia by transaction volume.” “The agreement between China and Brazil on the local currency has achieved a leap forward.” This spring, good news about the internationalization of the renminbi continued to spread.

According to a report on the website of Singapore's Lianhe Zaobao on April 4, one year after Russia was sanctioned by the West, the renminbi has replaced the US dollar as Russia's most traded foreign currency.

Bloomberg pointed out that data compiled by the daily trading report of the Moscow Exchange showed that the trading volume of the renminbi surpassed the US dollar for the first time in February, and the difference between the two became more obvious in March.The report said that before the Russia-Ukraine conflict, the trading volume of the renminbi in the Russian market was negligible.

The report said that the Russian Ministry of Finance reorganized the asset allocation of the National Wealth Fund at the end of last year and will not invest in assets denominated in U.S. dollars, while the renminbi's share in the fund is capped at 60%.

In an interview with the weekly newspaper "Arguments and Facts", Russian Foreign Minister Sergey Lavrov said that more than half of the settlements between Russia and China use local currencies.The content of the interview was published on the website of the Russian Ministry of Foreign Affairs on the 4th.

Lavrov said: “It is important that more than half of the settlement between us is carried out in our own currency. Cooperation is not limited to trade, but covers a wide range-from energy and industry to agriculture and aerospace.We have formed a positive interdependent relationship with China in the trade and economic fields, and the results of our work cannot be unsatisfactory.”

At the same time, in Brazil in South America, “de-dollarization” reflects that dollar settlement is “cracking.”
According to a report on the website of the South China Morning Post in Hong Kong on April 3, China is using its trade advantages to promote the use of the renminbi with major business partners, thereby enhancing the strength of the renminbi to challenge the dominance of the US dollar in the global monetary system, as highlighted by the recent progress with Brazil, the largest country in South America.

Promoting the use of renminbi for settlement in trade and investment instead of U.S. dollars as intermediaries is one of the many ways Beijing has set out to reduce its exposure to U.S. dollar assets and prevent China from being financially strangled by Washington.

According to reports, the agreement reached between China and Brazil has achieved a leap forward. Analysts expect that China will use RMB more in its overseas investment in participating countries of the “Belt and Road” initiative, energy trade with Middle Eastern countries, and cross-border payments in digital currencies.

Huang Yadong and Zhang Wenlang of CICC said in a report released on Monday that in the short term, this de-dollarization reflects cracks in the dollar-dominated global monetary system in the geopolitical context.

The two analysts said that this shows a long-term trend that the international status of the dollar will eventually be consistent with the economic status of the United States.

In recent years, China's RMB-denominated trade settlement and investment have seen double-digit growth.

China has also been lobbying for the use of the renminbi in bilateral crude oil trade with Middle Eastern countries.Beijing is also keen to promote more local currency trade and financial transactions with ASEAN member states.ASEAN is China's largest trading partner.

The bimonthly website of the U.S. "Foreign Policy" also wrote at this node that as the banking crisis spreads, China's neighbors are paying attention to the renminbi.

This article by Diana Joiliva, chief economist of Enodo Economics in the United Kingdom, pointed out that the recent turmoil in the U.S. banking industry has made people doubt whether the United States is capable of maintaining its leading position in the global monetary system.

The direct impact of this on the Asian banking market is limited, but the long-term impact may be significant.Because it is in Asia that the United States' global financial hegemony is being most fiercely contested by China.

The article believes that fundamentally, Beijing is trying to create a permanent and sustainable cycle in which the renminbi flows from China into the global economy and then back again.Beijing is trying to increase capital outflows by vigorously developing trade.At the same time, the main channel of capital inflow is investment in China's financial markets.

The failure of U.S. regulators to detect the imminent problems of Silicon Valley Bank will only increase the attractiveness of alternatives to the U.S.-led financial order to some Asian decision makers.In a region that relies on global dollar inflows and is therefore vulnerable to sudden fluctuations in U.S. monetary policy, frustration with Washington's economic management has been increasing.

The impact of the global financial crisis, what some economists believe is poor monetary management during the New Crown epidemic, and the recent hasty interest rate hike by the Federal Reserve after misjudging the severity of inflation have all damaged the economic reputation of the United States in Asia.

Asian countries create a large part of the world's savings flow.If China can attract them to its own financial sphere of influence, it will have greater power to counter the US-led financial order.