The US dollar as the world’s reserve currency is losing its lustre, and rather fast. With China’s economic power rising, coupled with the world’s growing distaste for US foreign policy, an increasing number of countries are looking for alternatives to the greenback in the event of a rainy day in Washington.
In a press conference on Monday later cited by several Arabic news outlets, Egyptian Finance Minister Mohamed Maait announced the country will issue $500 million worth of international bonds denominated in Chinese yuan, instead of US dollars or Egyptian pounds. The latest announcement comes as Egypt’s foreign currency reserves started to drastically plummet amid the conflict in Ukraine, which also disturbed its imports of wheat.
With the Egyptian government struggling to scale back its budget deficit, the country’s Ministry of Finance also announced it will issue Egyptian pound-denominated bonds valued at $600 million. The government has been working on the yuan bonds for awhile, announcing the intentions back in May alongside China’s foreign ambassador to Egypt.
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Also earlier this month Russia raised about $590 million from the sale of yuan-denominated bonds, as the country explores alternative currencies for raising capital and circumvent the US dollar. Likewise, Israel’s central bank boosted its foreign currency reserves with the yuan, while Saudi Arabia mulls using the yuan rather than the dollar for oil exports to China.
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
