Main priorities of a Free Trade Agreement are:
• addressing trade barriers;
• promoting investments; and
• fostering greater cooperation in areas such as technology, innovation and Intellectual Property rights.
• addressing trade barriers;
• promoting investments; and
• fostering greater cooperation in areas such as technology, innovation and Intellectual Property rights.
While the USD continues to enjoy a significant advantage because of the unrivalled depth of the US capital market and its vehicle-currency status, China's now two-decade-old project towards securing its share in use as global payment has made significant progress -
• Fast increase in cross-border use (now 47%) while increasing from 1.9% in January to 3.6% in October globally. How so?
• China's 30-plus bilateral currency swap lines with other central banks that used to sit idle are now getting drawn in financially strapped countries, thereby putting more yuan in circulation outside national borders.
• Chinese banks lend overseas more in their local currency which borrowers perceive to come with a lower rate compared to the USD.
• The western sanctions have made Russia critically dependent on Beijing to the extent of demanding payment as suppliers from Indian refiners in yuan.
• China's cumbersome capital controls have eased, allowing some multinationals integrate local and foreign currency cash pools and transfer them between their domestic and overseas subsidiaries without prior approval.
Kayode
• Fast increase in cross-border use (now 47%) while increasing from 1.9% in January to 3.6% in October globally. How so?
• China's 30-plus bilateral currency swap lines with other central banks that used to sit idle are now getting drawn in financially strapped countries, thereby putting more yuan in circulation outside national borders.
• Chinese banks lend overseas more in their local currency which borrowers perceive to come with a lower rate compared to the USD.
• The western sanctions have made Russia critically dependent on Beijing to the extent of demanding payment as suppliers from Indian refiners in yuan.
• China's cumbersome capital controls have eased, allowing some multinationals integrate local and foreign currency cash pools and transfer them between their domestic and overseas subsidiaries without prior approval.
Kayode
Wondering what bilateral currency swap lines are?
Bilateral currency swap lines are agreements between two countries' central banks to exchange their currencies at a pre-agreed rate and for a specified period. They're used to provide liquidity in case of financial stress or to stabilize exchange rates. This arrangement helps ensure the availability of foreign currency, boosting confidence in financial markets.
Bilateral currency swap lines are agreements between two countries' central banks to exchange their currencies at a pre-agreed rate and for a specified period. They're used to provide liquidity in case of financial stress or to stabilize exchange rates. This arrangement helps ensure the availability of foreign currency, boosting confidence in financial markets.