Iraq’s Central Bank to Allow Trade with China to be Settled in Chinese Yuan

February 22, 2023        Mary Scott        4120

Iraq’s Central Bank to Settle Trade with China in Chinese Yuan Instead of US Dollars

Iraq’s central bank recently announced a significant decision to allow trade with China to be settled in Chinese yuan instead of US dollars. This move marks a shift away from reliance on the US dollar in international trade, which has been the standard currency for global transactions for decades.

The decision by Iraq’s central bank to settle trade in yuan reflects China’s growing economic power and influence in the region. China is Iraq’s second-largest trading partner, and the two countries have been exploring ways to strengthen their economic ties in recent years. The use of yuan in trade settlement is expected to facilitate trade and investment between the two countries and reduce transaction costs, as well as offer a hedge against fluctuations in the value of the US dollar.

The Significance of This Shift in International Trade

This move by Iraq is part of a larger trend among countries seeking to reduce their reliance on the US dollar in international trade. Many countries, including Russia, Iran, and Venezuela, have also explored alternatives to the US dollar in recent years. The shift away from the US dollar could have significant implications for the global economy and the dominance of the US dollar as the world’s reserve currency.

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