China is planning to extend renminbi loans to other major emerging BRIC countries in another step toward the expansion of the yuan’s role in foreign exchange, the Financial Times reports.
The China Development Bank (CDB) will sign a memorandum of understanding at a meeting with its Brics counterparts – Russia, South Africa, Brazil and India – in New Delhi on March 29…Under the agreement CDB, which lends mainly in dollars overseas, will make renminbi loans available, while the other Brics nations’ development banks will also extend loans denominated in their respective currencies, the FT said in an article published on its website.
The renminbi is the official currency of China and its primary unit is the yuan. Of the six largest economies in the world, China is the only one whose currency does not have reserve status.
The initiative aims to boost trade between the five Brics nations and promote use of the renminbi, rather than the US dollar, for international trade and cross-border lending, the FT said… Makes sense to me.
BNDES, Brazil’s development bank, and South Africa’s finance ministry were cited by the FT as saying they expected an agreement to be signed at the New Delhi meeting which would include the lending pledge, with details to be ironed out during a summit.
Other signatories would include Russia’s Vnesheconombank, the Export-Import Bank of India and the Development Bank of Southern Africa, according to the article.
Over the next decade the word of this will gradually be included in monthly briefing notes to members of the US Congress. I imagine that sooner or later another aspect of global commerce and monetary policy will sink in. Slowly.
Probably bring them up to about 1929.