Posted by Icon8888 > 2015-10-12 23:51 | Report Abuse

China is starting Yuan denominated Oil Futures soon

That will provide the platform to trade oil in Yuan

Posted by TECHfullyBREWED > 2015-10-13 00:01 | Report Abuse

its going to significantly impact the demand for USD

Posted by Icon8888 > 2015-10-13 00:05 | Report Abuse

In November, IMF members will vote to decide whether Renminbi will become SDR reserve currency

Posted by TECHfullyBREWED > 2015-10-13 00:09 | Report Abuse

Its probably why China has been dumping US Treasuries.

Posted by Icon8888 > 2015-10-13 00:11 | Report Abuse

They have been dumping USD to keep Yuan strong

This is to ensure that IMF members will vote in favor of Yuan inclusion

You can't convince people to support Yuan as reserve currency if the currency keeps dropping

Posted by Icon8888 > 2015-10-13 00:14 | Report Abuse

Their dumping of USD has caused their USD reserves to drop drastically over past few months (few hundred billion Dollars)

But this is not a problem, they can always print Yuan to buy back the USD when necessary

Posted by Icon8888 > 2015-10-13 00:16 | Report Abuse

They have the opposite problem as Malaysia

We are trying to spend our USD to buy RM so as to keep RM strong

They are busy selling their USD to keep their Yuan strong so as to garner support for the coming November SDR vote

Posted by TECHfullyBREWED > 2015-10-13 00:16 | Report Abuse

Thats true

Posted by Icon8888 > 2015-10-13 00:21 | Report Abuse

If the November SDR vote is successful, many countries Central Bank will start buying Yuan to form part of their reserve

When that happens, China don't need to keep selling USD anymore, the Central Banks buying will propel the Yuan upwards

Strong Yuan is part of their strategy to transform the economy to more consumption driven

Posted by TECHfullyBREWED > 2015-10-13 00:33 | Report Abuse

Thanks for your views Icon.

Posted by BenBlurBlur > 2015-10-13 00:34 | Report Abuse

How do you reconcile what you say with the around 4% devaluation in the Yuan recently?? Thank u

Posted by Icon8888 > 2015-10-13 00:39 | Report Abuse

They didn't really directly devalue

What they did was to change their method of controlling the Yuan by switching to a more market driven method endorsed by IMF. The end result was that market forces steps in to bring it down by 4%

IMF was pretty pleased with them adopting the new mechanism (despite all this while criticizing China for undervaluing its currency)

Posted by Icon8888 > 2015-10-13 00:40 | Report Abuse

In any event, 4% is not much

RM has devalued by more than 30%

So despite the 4% devaluation, the statement that China kept its currency strong is still true

Posted by BenBlurBlur > 2015-10-13 00:40 | Report Abuse

Not very convincing is it?? Thank u

Posted by Icon8888 > 2015-10-13 00:41 | Report Abuse

Ha ha that is just my observations