Iraq To Settle China Trades In Yuan, Not US Dollars
Iraq’s central bank has announced plans to settle trades with China in yuan, instead of the dominant US dollar. In a statement given to Reuters, the Central Bank of Iraq expressed a vision of improving access to foreign currencies. This move comes shortly after Saudi Arabia’s finance minister expressed similar willingness to settle trades in currencies other than the US dollar.
JUST IN: 🇮🇶 Iraq’s central bank to allow trade with China to be settled in Chinese yuan instead of US dollars.
— Watcher.Guru (@WatcherGuru) February 22, 2023
Break from Dollar-Only Imports
“It is the first time imports would be financed from China in yuan, as Iraqi imports from China have been financed in (U.S.) dollars only,” said Mudhir Salih, the economic adviser for Iraq. This move by the Central Bank of Iraq may potentially mark a significant shift in international trade patterns, which have been dominated by the US dollar.
China has faced economic turmoil in the past few years due to the COVID-19 pandemic and its aftermath. However, the People’s Bank of China has injected almost $92 billion into the market, indicating a strong attempt to stimulate the economy. Additionally, while China has banned cryptocurrency mining and trading, the injection of Chinese money into the market has led to gains for China-based cryptocurrencies such as Conflux, Flamingo, and Neo.
Changing Geopolitical Landscape in Global Trade
The move by Iraq’s central bank to settle trades in yuan is expected to improve the country’s access to foreign currencies and diversify its trade partnerships. It is a significant step in breaking the dominance of the US dollar in international trade and may prompt other countries to follow suit.
While it remains to be seen how this shift will impact the global economy in the long term, it is clear that countries are beginning to explore alternative options to the US dollar. This may be a reflection of a changing geopolitical landscape, as countries seek to assert their independence and pursue new trade partnerships.
