China doubles down on promoting yuan as confidence in U.S. dollar takes a beating
In summary:
Three major Chinese exchanges recently opened 16 additional futures and options contracts — covering commodities like rubber, lead, and tin — to qualified foreign institutional investors. The move is part of a broader push to embed the yuan more deeply into global commodity pricing and financial transactions.
Beijing has also taken steps to attract international investors:
ETF options trading will be opened to foreign investors.
Morgan Stanley’s China unit has gained approval to expand brokerage services.
Despite increased momentum, challenges remain. Capital controls, limited asset liquidity, and legal opacity continue to deter many investors. Analysts also caution that China must do more to address geopolitical risks tied to its markets.
Still, the yuan’s role is growing, aided by regional de-dollarisation trends and investor moves to hedge against U.S. assets. According to State Street Global, institutional flows into yuan assets have strengthened this year — though positioning remains light, leaving scope for further inflows.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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