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【Argentina allows banks to open yuan accounts - economists say this may promote the yuan as a safe-haven alternative to the dollar】
The Central Bank of Argentina has officially listed the renminbi as a recognized currency for bank account deposits. One economist explained: “Opening a yuan account could attract more people and businesses to convert Argentine pesos to yuan, more or less a 'safe haven' currency, than to convert all local currencies into dollars.
[Argentine Banks Approved to Open RMB Accounts]
The announcement states (translated by Google):
The Central Bank of the Argentine Republic has included the Chinese yuan as an accepted currency for savings bank and checking account deposits. As a result, financial entities will be able to open bank accounts denominated in renminbi.
The Argentine central bank's decision to include the yuan comes in line with the country's struggles with dwindling dollar supplies. The move also coincides with China's efforts to internationalize its currency.
In addition, the Argentine National Securities Commission will announce that it will allow trading of RMB-denominated securities. Earlier this month, the People's Bank of China, the People's Bank of China (PBOC) and the Central Bank of Argentina signed an agreement for a bilateral currency swap of 1.7 billion yuan ($900 million) over three years.
Dong Jinyue, senior China economist at BBVA Research, was quoted by the South China Morning Post as saying:
Opening a RMB account could attract more people and businesses to convert Argentine Pesos into RMB, more or less a "safe haven" currency, than convert all local currencies into USD.
["Diversification of foreign exchange will certainly help to alleviate the dollar shortage in Argentina, because the dollar is not the only foreign exchange,"] he believes.
Stephen Olson, Senior Research Fellow at the Hinrich Foundation, described:
[Given rising geopolitical tensions, China is increasingly uncomfortable with the dollar's prominent role in international trade. 】
Some, including TD economist Vikram Rai, believe the yuan has the potential to erode the dollar's dominance in global financial markets. Andrey Kostin, chairman of Russia's VTB Bank, which has been sanctioned by the United States, said in May this year that the renminbi may replace the U.S. dollar as the world's main reserve and settlement currency as early as the next decade. In addition, many expect the proposed BRICS common currency to challenge the hegemony of the dollar.