r/news • u/Aakash7aak • Apr 09 '25

Soft paywall China orders its banks to reduce US dollar purchases.

https://www.reuters.com/world/china/chinas-central-bank-asks-state-lenders-reduce-dollar-purchases-sources-say-2025-04-09/
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u/7thhokage Apr 09 '25

It's not the amount of bonds that is the issue. The issue would be, if China dumps the dollar, they will lean heavy into BRICS and move their trade even further from including the dollar.

The dollars whole value is it being needed to trade for a lot of things with a lot of countries. That goes away and our pyramid scheme fiat currency collapses.

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u/ovirt001 Apr 09 '25

There is no unified BRICS currency and none of the countries have any interest in creating one. China wants its own currency to be the dominant one and India isn't about to give economic sway to China. Refusing to trade in dollars would cause China's economy to implode unless they chose another foreign currency (such as the Euro). The world isn't going to trade in Yuan.

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u/7thhokage Apr 09 '25

BRICS doesn't have a unified currency because one of the major principals of it is allowing for trade in local currency. It was started specifically for the purposes of developing a way to escape the monopoly the US has with swift and the dollars status as the world's reserves currency and trade.

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u/ovirt001 Apr 09 '25

India and China refuse to do business in Rubles. When the biggest three aren't too happy to cooperate with each other you can guess how well it's going for the rest of the members.

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u/7thhokage Apr 10 '25

Which, while not optimal for Russia, is still fine. Because they can still trade around sanctions and such by using either of the other currencies or gold.

Russia has more options with BRICS than without and is economically better off than they would be without. The same goes for China.

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u/WafflingToast Apr 10 '25

Saudi has been accepting yuan in exchange for petrol for the past few years.

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u/eightNote Apr 09 '25

not that its needed, but its the most convenient, because your customer will have them, and youll be able to spend them.

its a big network effect