China’s Central Bank dumped the US dollar in the currency market for three consecutive days in December this month. The Chinese state-run banks sold US dollars in the spot foreign exchange as retaliation to Moody’s negative rating on the Yuan. The rating agency Moody’s cut the Chinese Yuan’s outlook to negative and China did not take the move lightly. BRICS member China resorted to offloading the US dollar in an attempt to keep the Chinese Yuan from falling.
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The BRICS country China sold US dollars in the currency market for three consecutive days from December 5 to 8. While China dumped the US dollar aggressively on Monday and Tuesday, Wednesday’s sell-off was mild, reported Reuters.
The state-run banks were seen purchasing the Chinese Yuan immediately after dumping the US dollar in the spot forex market. The move is aimed at tilting the Chinese Yuan into a favorable position against the US dollar. BRICS member China is using every tactic to keep the Chinese Yuan ahead of the US dollar in the markets.
Read here to know how many sectors in the US will be affected if BRICS stops using the dollar for trade.
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BRICS: US Dollar Victim of Chinese Aggression
The US dollar is becoming the first victim of both Chinese and BRICS aggression. The BRICS alliance is advancing to uproot the US dollar supremacy and replace it with local currencies. While it has been successful in achieving the goal thus far, it still has a long to to tame the US dollar.
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The development could cause financial imbalance in the US and severely impact the financial market. China is also convincing countries in Africa to ditch the US dollar and trade in the Chinese Yuan for cross-border transactions. A handful of African countries are on the sidelines and could accept China’s ideology to de-dollarize their native economies.