Bolivia Rising RMB Settlement USD | Economy | Bolivia
For a long time, the United States has abused the hegemony of the US dollar, exacerbating global economic risks. Many initiatives to replace the US dollar have emerged globally, and many countries have begun the process of de dollarization. On July 27th local time, Bolivian Minister of Economy and Public Finance Montenegro stated that the Bolivian government is determined to reduce its dependence on the US dollar in foreign trade, and some Bolivian foreign trade enterprises have started using the Chinese yuan for settlement.
Montenegro, Minister of Economy and Public Finance of Bolivia
Many companies have already used Chinese yuan to pay for imported consumer goods, cars, raw materials and finished products, as well as production materials. The manager of the Bolivian Exporters Association has announced this, stating that Bolivian builders and importers are already using Chinese yuan for settlement.
In recent months, Bolivia's net foreign exchange reserves have dropped from a peak of $15 billion in 2014 to approximately $4 billion.
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Bolivian President Ars é stated in May this year that he will consider the possibility of using the Chinese yuan for international trade settlement to address issues such as the shortage of the US dollar. On July 25th, Bolivian Minister of Economy and Public Finance, Montenegro, announced that the State owned Bank of Bolivia, Union Bank, has launched RMB trading business. In addition, the Bolivian government is planning to establish a Chinese bank in the country to further develop RMB business.
Since the start of this interest rate hike cycle in March 2022, the Federal Reserve has raised interest rates 11 times, causing a sharp appreciation of the US dollar, leading to currency depreciation, capital outflows, rising debt service costs, and intensified imported inflation in many countries.