China is preparing to launch an oil futures contract based on its domestic currency instead of dollars in an effort to promote the renminbi as a global reserve currency.
It appears the liberal mainstream media is finally waking up to what TruNews readers have known for several months, that China is about to launch domestic oil futures trading not valued in American dollars, which will hugely impact the dollar’s “well-established role” as the global currency of trade.
According to a new report, the “petro-yuan” futures contracts will be offered beginning Jan. 18, following multiple rounds of testing. The Shanghai Futures Exchange will be traded under the “INE” acronym. Like all futures contracts, it will set a price in the present for the delivery of oil at a future date. Futures trading usually outpaces physical oil trading by a more than 20-to-1 ratio.
This will allow the yuan to undercut the dollar in global trade in the long term. In the short term, it’s unlikely to have a major impact on the dollar, the petro-dollar, or global trade. The Chinese oil futures contracts also will not have the relative stability of dollar-based oil contracts, and it’s unlikely non-Chinese investors will be allowed to participate initially. But President Xi Jinping seems to be focused on a long play.
Posted by The NON-Conformist