Russia and China Finding Ways to Avoid the U.S. Dollar

ISTOCK.COM/RONNIECHUA

 

It is becoming easier to imagine the coming post-American financial order.

At Bretton Woods in 1944, the world’s major powers settled on a new financial system. That system of world finance was dominated by America. When the system fell apart in 1971, countries switched to floating exchange rates, but the U.S. dollar remained the reserve currency. But today, in the post-global-financial-crisis world, Russia and China are finding new ways to avoid using the dollar.

Renminbi (RMB) Yuan Clearing Bank To Open In London

A RMB Yuan (CNY) clearing bank will be officially appointed in the United Kingdom (UK) in June, said Mark Boleat, policy chairman for the City of London Corp, in an interview at the weekend.

“There will be a clearing bank in London. In due course, there will be an announcement,” Mr. Boleat said. The news will be an endorsement for London’s efforts to become an offshore yuan center. Other European financial centers in the race to become a Yuan center include Frankfurt, Paris, Switzerland and Luxembourg.

An official clearing bank facilitates efficient clearing of offshore Renminbi transactions, achieved through the appointed bank’s direct cooperation with the People’s Bank of China (PBOC) , the country’s central bank.