BRICS Update: China Ditches US Dollars in 3-Day Crypto Spree

• BRICS Member China Continues US Dollar Offloading to Safeguard Chinese Yuan
• Chinese Banks Accelerate US Dollar Dumping in Forex Markets Following Moody's Ratings
• China's Aggressive Sell-Off Tactics May Not Last
• BRICS' Efforts to Protect Local Currencies and Replace US Dollar
• Chinese Yuan vs US Dollar Status

BRICS Member China Continues US Dollar Offloading to Safeguard Chinese Yuan

China, a member of BRICS, is once more selling its US dollars in worldwide currency markets to shield the Chinese Yuan. This week, China's state-controlled banks disposed of US dollars in the spot foreign exchange markets for three consecutive days - Monday, Tuesday, and Wednesday. The drastic action ensued after Moody's rating agency downgraded China's financial outlook, potentially leading to a weakened Yuan in global markets.

Chinese Banks Accelerate US Dollar Dumping in Forex Markets Following Moody's Ratings

In response to the Moody's ratings, Chinese state-controlled banks increased their efforts by assertively offloading US dollars in forex markets. Over a period of three days, the banks sold US dollars and immediately purchased Chinese Yuan. The strategy is geared towards enhancing the position of the Chinese Yuan against the US dollar.

China's Aggressive Sell-Off Tactics May Not Last

On Monday and Tuesday, China aggressively sold US dollars; however, the sell-off activity on Wednesday was comparatively moderate, according to Reuters. Sources familiar with the matter have indicated that these tactics may not be sustainable in the long run. They believe the impact on the Chinese Yuan from Moody's decision may not endure.

BRICS' Efforts to Protect Local Currencies and Replace US Dollar

BRICS and its expanded alliance are endeavoring to protect their local currencies from the US dollar. BRICS is making strides to overthrow the US dollar's global reserve status to replace it with their local currencies.

Chinese Yuan vs US Dollar Status

As of December, the Chinese Yuan is at a 16-year low against the US dollar, having dropped to 7.15. Firm US jobs data has bolstered the dollar, causing the Yuan to plunge to a 10-month low this year. The local currency of BRICS member China, the Yuan, has depreciated by 6.14% against the US dollar in the last 30 days alone. On a year-to-date basis, the Yuan is still down 3% against the increasing US dollar.

Edited by Jonathan Stoker