China to create yuan liquidity reserve pool with BIS, Malaysia, four others — PBOC
Sat, Jun 25, 2022 09:59pm - 5 hours View Original
(June 25): The People’s Bank of China (PBOC) will create a yuan reserve pool with the Bank for International Settlements (BIS) and five other regulators to provide liquidity to participating economies in periods of market volatility.
China along with Indonesia, Malaysia, Hong Kong, Singapore and Chile will each contribute a minimum of 15 billion yuan (US$2.2 billion or about RM9.87 billion) or US dollar equivalent to the so-called Renminbi Liquidity Arrangement, according to a PBOC statement on Saturday (June 25). The funds will be placed with the BIS.
“When in need of liquidity, participating central banks would not only be able to draw down on their contributions, but would also gain access to additional funding through a collateralised liquidity window,” according to the statement.
The agreement marks the latest step from Beijing to push the internationalisation of the Chinese currency, challenging a global financial system dominated by the US dollar.
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How can depositing US $ in RMB liq pool help depose the US$?
Not sure what is the purpose of such a liquidity pool. maybe testing the waters to see if tiong rmb can be internationalized.
jiuhu indon need to take cautious step not to anger yankee ang moh kia or euros, or to fall into any debt trap or liquidity trap
consider all possibilities, good or bad, first before making a dip
