China decided to press the dominance of the dollar
China, starting March 26, will start trading in oil futures in RMB, reports the Chinese Commission for Regulation of the Securities Market.
According to Bloomberg, foreign investors will gain access to the Chinese commodity market for the first time. If they accept futures in chinese currency as a benchmark for the market, it will shake the dollar's position as the leading currency of the oil trade, the agency said.
However, experts interviewed by the agency believe that this is not a matter for the near future. In addition, if investors agree to conduct transaction in RMB, world oil prices will still go in dollars. In addition, Bloomberg points out, traders will face tough capital controls in China.
Bloomberg notes that in 1993, China started trading in oil contracts in RMB, but closed it in a year because of high volatility.
By the end of 2017, China became the world's largest importer of oil, outstripping the United States. Chinese purchases amounted to 8.4 million barrels per day.