Fri, April 26, 2024 at 18:14

• 

  Kang-hoon

  • Good day, Annie.

  • I have news about China's recent financial activities.

  • According to the Treasury Department, China has sold more than $74 billion in US Treasuries in the last year, decreasing its holdings from $849 billion to $775 billion between the beginning of Q2 2023 and Q2 2024.

  • 
• Annie

  • Oh wow!

  • That's a significant decrease.😮 Why did China decide to sell off so much?

  
• 

  Kang-hoon

  • That's a good question, Annie.

  • There could be several reasons, but one of the main ones is that China and Russia have almost completely stopped using the dollar in their mutual trade.

• Annie

  • Really?

  • So, they're not using the dollar at all?😲

  
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• 

  Kang-hoon

  • Indeed.

  • According to Russia's Foreign Minister Sergei Lavrov, more than 90% of settlements between the countries are now carried out in their own national currencies.

• Annie

  • That's quite a shift!

  • What does this mean for the US?🤔

  
• 

  Kang-hoon

  • Well, this could potentially undermine the dollar's dominant role in global financial flows and the world economy.

  • Lavrov mentioned that we are starting to see a flight from the dollar.

• Annie

  • Oh no!

  • That doesn't sound good.😟

  
• 

  Kang-hoon

  • Yes, it's a concerning trend.

  • And it's not just China and Russia.

  • Other countries have also let go of small amounts of Treasuries holdings over the last quarter, with India selling $1.4 billion, Brazil unloading $1.2 billion, and Saudi Arabia shedding $0.3 billion.

• Annie

  • So, it's not just a China-Russia thing then?😕

  
• 

  Kang-hoon

  • Correct.

  • It seems to be a broader trend.

  • In fact, Lavrov stated that this trend is irreversible.

• Annie

  • Oh dear...So, is this news bad or good?

  • What impact will it have on the market?

  
• 

  Kang-hoon

  • In my view, this news is not good.

  • The weakening of the dollar's position could lead to instability in global financial markets.

  • 

  • It's important to keep a close eye on these developments.

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.