Institutional Investor (June 11)
“De-dollarization doesn’t mean capital is leaving America.” Investment decisions are often deceptively labeled de-dollarization even though the capital remains in the U.S. and is simply “changing form, swapping fixed financial claims on dollars for ownership of assets that generate cash flow and reprice with inflation.” Sovereign wealth funds and other institutional investors haven’t dumped dollars, “but increasingly avoid holding dollar claims. Bonds are giving way to utilities, pipelines, and logistics networks. Investors are moving away from returns locked in nominal dollars into assets whose income adjusts with inflation.”
Tags: Adjusts, Assets, Capital, Cash flow, Claims, De-Dollarization, Fixed financial claims, Income, Inflation, Investment decisions, Nominal dollars, Ownership, Reprice, Returns, Sovereign wealth funds, U.S.
OilPrice.com (May 24)
De-Dollarization has begun. In China, the majority of cross-border payments had always been in dollars. “In March 2023, the share of the RMB in China’s settlements surpassed the USD for the first time.” In other transactions, the currency’s progress may be masked. For example, “the Bank for International Settlements reveals that, in 2022, the USD remained the most-used currency for FX settlements. The euro and the Japanese yen came in second and third, respectively.” However, “the Chinese renminbi, though accounting for a relatively small share of FX transactions, gained the most ground over the last decade. Meanwhile, the euro and the yen saw decreases in use.”
Tags: BIS, China, Cross-border payments, De-Dollarization, euro, FX, Japan, Renminbi, RMB, Settlements, Transactions, USD, Yen
