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Monetary world accelerating their de-dollarization as ECB trades in dollar reserves for RMB

Monetary world accelerating their de-dollarization as ECB trades in dollar reserves for RMB

On June 13 the European Central Bank (ECB) confirmed that they had recently, and for the first time ever, sold 500 million euros worth of dollar reserves and used the proceeds to instead by the Chinese RMB.

This move serves a two-fold purpose for the central bank as Europe has experiencing increased trade with China over the past few years, and trust and confidence in the dollar is waning as the world begins to isolate the U.S. for many of their foreign and monetary policies.

The European Central Bank (ECB) confirmed on June 13 that it has for the first time changed 500 million euros from U.S. dollar reserves to the Chinese RMB, according to the Financial Times. The move is said to reflect the increased use of the Chinese currency and Beijing’s importance as one of the largest trading partners of European nations.

Last year, the RMB was included in the International Monetary Fund’s elite basket of currencies and gained its “special drawing rights.” The ECB’s recent reserve conversion marks another milestone in the RMB’s internationalization. – EN.People.CN

Additionally, Europe is recognizing that Eurasia and the Far East are most likely to be the eventual winners in the battle to run the next global monetary system, which will be built on bi-lateral trade and not the need for a singular global reserve currency.

China has been hesitant in forcing an expansion and internationalization of their RMB currency, and have relied upon the financial centers in London and Frankfurt to sell their bonds to begin this process.  But now with a major central bank like the ECB getting on board, and trusting in their currency enough to hold it in their primary reserves, the door is now wide open for many other nations to do the same, meaning global de-dollarization will only accelerate.

Kenneth Schortgen Jr is a writer for The Daily Economist, Secretsofthefed.comRoguemoney.net, and Viral Liberty, and hosts the popular youtube podcast on Mondays, Wednesdays and Fridays. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.


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