Free Republic

Chinese planners are once again taking aim at the dollar. On June 17, the governor of the People’s Bank of China unveiled a fresh blueprint to pull the world’s financial streams into the Chinese yuan, including pilot schemes for offshore yuan trading and new swap lines for central banks. Expect the usual chatter about de-dollarization to hit fever pitch ahead of the annual BRICS summit in September in New Delhi, where China and Russia are likely to push for their de-dollarization cause. Over the past decade, Beijing has made genuine progress in building alternative financial channels across three fronts: trade...

BRICS countries show little interest in Moscow’s proposal for an alternative financial system. Browsing through the official photos of the annual BRICS summit in the Russian city of Kazan last month yields intriguing surprises. In several of them, Russian President Vladimir Putin holds a mock-up banknote featuring the flags of the five core BRICS countries—Brazil, Russia, India, China, and South Africa. Looking at the pictures, one could be forgiven for assuming that the BRICS had just launched a common currency. This is exactly what Moscow would like the world to think as part of its bid to demonstrate that Russia...

“The latest round of U.S. sanctions was a mostly symbolic exercise,” Agathe Demarais, global forecasting director at The Economist Intelligence Unit, told CNBC on Friday. “Sanctions on Russian individuals and companies are irrelevant, as these people and firms have no ties to the US and probably no intention to ever use the U.S. dollar or to have bank accounts in the U.S.” Demarais added that the sanctions on sovereign debt are less stringent than the initial market reaction would suggest, since they only target the primary debt market and can therefore “easily be circumvented via the secondary market.”