Affin Moneybrokers Sdn Bhd’s Post

Over the weekend, Donald Trump delivered a bold warning to BRICS nations, threatening 100% tariffs on U.S. imports if they abandon the dollar—a move widely perceived as a PR tactic targeting the American audience. Nikolay Stoykov, managing partner at Alaric Securities, analyzed the situation and shared his insights on Bloomberg TV Bulgaria’s morning show with host Hristo Nikolov. 🔹BRICS common currency remains a distant dream, with no concrete steps toward its creation. 🔹The yuan’s potential as a global currency depends on China’s readiness to loosen its control. 🔹The dollar’s dominance persists but faces increasing competition from the euro. 🔹Trump’s tariff threat seems to be more about political posturing than actionable policy. Check the interview for more insights.

There are two roads to narrowing the US-China trade deficit: either reducing China's exports to the US or increasing China’s imports of US goods. Given the respective impacts on inflation and job creation, we would assume the latter would also be a welcome outcome for the Trump administration.

Chinas move to ink bilateral agreemen with developing nations for local currency swap for bilateral trade can cause lot of ripple effect on current US$ driven global trade..If India and Russia follows China the world order will change..

Chinese authorities are contending with a weakening yuan as global investment banks forecast the currency to hit record lows, in anticipation of U.S. president-elect Donald Trump following through with his tariff threats. Major investment banks and research firms project offshore yuan to weaken to an average 7.51 per dollar through the end of 2025, according to CNBC's calculation of forecasts from 13 institutions. That would mark the currency's weakest level on record, according to LSEG data going back to 2004.

The U.S.'s push to maintain dollar dominance through measures like 100% sanctions could inadvertently strengthen BRICS's resolve to create alternatives. While the dollar's current strength offers stability, overreliance on aggressive trade restrictions could backfire. From my perspective, imposing such extreme measures isn't viable. The U.S. depends heavily on global imports, and with few alternatives, such sanctions would strain supply chains and damage its own economy. https://lnkd.in/ej5gKMUY

https://lnkd.in/g5EwAR6R India has been among key nations attempting to boost the use of local currencies to address trade-related disruptions in the world, particularly owing to sanctions and a US dollar reserve crunch in certain countries. Russia, the UAE and Singapore are some of the nations that have taken steps to allow the use of in-house payment interfaces as well as domestic legal tenders to smoothen transactions with New Delhi. The incoming US president’s latest tariff threat over a proposed BRICS currency extends his policy to address socioeconomic matters with trade-related steps. Only a few days ago, he announced a decision to impose additional duties on products flowing in from Canada, Mexico and China in response to issues around migration and drugs. While some experts are of the view that Trump’s proposal is premature given that there have been no serious movements in launching a separate BRICS currency, others called for careful navigation by India to balance its role within the multi-nation grouping and its strategic relationship with America.

China may need to exercise caution when promoting the overseas use of the yuan over the next four years, analysts said, as US president-elect Donald Trump appears poised to make the preservation of the status of the US dollar a top priority in his second term. But given the yuan’s current share of international payments, foreign exchange reserves and commodity pricing – none of which befit China’s status as producer of 17 per cent of global economic output, they argued – US policy will do little to deter Beijing’s long-term plans for the internationalisation of its currency. Zhu Feng, dean of the Institute of International Relations at Nanjing University, said the use of local currencies among developing nations is unrelated to any broad de-dollarisation campaign. Even though the yuan would benefit most from a local currency push thanks to the overall weight of the Chinese economy and Beijing’s status as a lifeline for Moscow, the internationalisation of the currency will take decades. “It’s a trend not defined by what happens in the next four years … the yuan cannot acquire a meaningful global stature in such a short time frame,” he said. “China should continue to focus on economic development and trade growth to underpin the yuan’s rise.” Some actions have, however, helped to speed that process along. The People's Bank of China, China’s central bank, has agreed to 40 bilateral swap lines with other nations enabling them to exchange local currencies for the yuan. The Shanghai-based New Development Bank (NDB) has also resolved to increase the share of loans it disburses in local currencies to 30 per cent by 2026. China’s own alternative to Swift, the Cross-border Interbank Payment System, is also being pitched for more frequent overseas use in conjunction with the mBridge cross-border digital currency initiative. Source: South China Morning Post SCMP

My latest column on the Brics currency: Trump’s threat of tariffs over a currency that will likely never exist is a reminder of how much clout the dollar has in the developing world: https://lnkd.in/d6gcUXpx

The Chinese yuan is surging rapidly in trade settlements elbowing the Euro to become the second most used currency. BRICS member China is advancing in toppling the Euro making the Chinese yuan take the spot below the US doll

A weaker exchange rate versus the dollar and other major trading partners would be one way for Chinese officials to prop up exports affected by higher tariffs. During Trump's first term, the yuan shed around 13% against the dollar in 2018 and 2019 as tariffs were imposed on a range of Chinese goods entering the U.S. It will be interesting to see the impact to global currencies and trade flow once Trump takes office and begins to impose new rounds of punitive tariffs. #china #yuan #currency #Trumptariffs