DAILY BASKET – NEWS COMMENTARY
Russia And China Setting Up An Alternative To The Dollar?
MARSAL COMMENTS: On March 14th, Russia opened a branch of its central bank in Beijing, and earlier, China had opened a clearing bank in Moscow. Their objective is to facilitate trade settlement in Rubble, Yuan and of course, gold.
It will also facilitate the issuance of both countries’ bonds in their currencies rather than Dollars. The first exercise will be Russia’s son-to-be-issued bonds in Yuan.
Additionally, Russia is selling massive amounts to Russian produced Gold to China. This is on top of their massive buying of gold on the open markets throughout the past few years. Is Russia and China working their way towards a replacement of the US Dollar as a reserve for their currencies? To be later followed by the rest of the BRICS members and other Euro-Asian economies?
So far, this seems to be a successful strategy. Trade between Russia and China has increased 34% in January 2017 reaching US$ 6.55 Billion.
NEGATIVE FOR: US Dollar and to a lesser extent the Euro, Yen and Pound
POSITIVE FOR: Russia, China, Brics
IMPACT POTENTIAL: High
TIME SCOPE: Medium & Long Term