Leading global bank JP Morgan forecast the future of the US dollar against the local currency of BRICS members, the Chinese yuan (renminbi). China, a member of the BRICS group, is moving to replace the US dollar and replace the global reserve currency with the Chinese yuan. China is taking several steps to keep the renminbi higher than the US dollar, making its local currency more acceptable in global trade. The battle to make local currencies better than the US dollar was started by China through its de-dollarization initiative.
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BRICS: JP Morgan predicts how the US dollar will move against the Chinese yuan in the future
JP Morgan Global Research published a report entitled “De-dollarization: Is the US dollar losing its dominance?.“ Alexander Wise, who wrote the report, said the Chinese yuan is a popular payment option in developing countries. He discussed the BRICS group, the Chinese yuan, and the role of China as a whole in the collapse of the US dollar.
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With China's growth central to global trade, one would naturally expect the renminbi to assume a greater role in the global economy over time. The wise man mentioned. The analyst added that for the Chinese yuan to overtake the US dollar, the communist government needs to take more concrete steps to reach the top.
he added, “Easing capital controls, opening markets, implementing measures to enhance market liquidity, strengthening the rule of law, reducing allocation and regulatory risks, and promoting Chinese government bonds as safe alternative assets – all of this would strengthen China and the renminbi as a reliable alternative.” For the United States and the dollar.
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Currently, China has not opened its markets and remains conservative in its approach. None of the points mentioned in the JP Morgan report reflect the methods currently being followed by China. Therefore, the overtaking of the local currency of China, a BRICS member, the Chinese yuan, the US dollar may not be valid in this contract.
The US dollar also remains the de facto global currency, and the other BRICS currencies do not come close to the US dollar. In conclusion, the Chinese yuan has a long way to go to reach the top, let alone overthrow the US dollar.
