South Korea has gone on a tear, putting together native currency swap deals with multiple countries - United Arab Emirates, Indonesia, Malaysia - at a very rapid rate.
South Korea, Malaysia sign US$4.7 billion currency swap deal
SEOUL: South Korea and Malaysia on Sunday signed a currency swap agreement worth $4.7 billion, Seoul's central bank said, in a move to encourage bilateral trade and help curb currency swings.Granted, the upper caps of these deals don't seem too big amounts on global trade scales; more like pimples on an elephant's butt. But the point is that framework for bypassing unstability of US Dollar are being put in place. If future trade amounts among those nations pick up, there goes the US Dollar by the wayside.
The latest agreement allows the two Asian nations to purchase and repurchase each other's currency of up to 5 trillion won ($4.7 billion), or 15 billion ringgit, the central Bank of Korea said in a statement.
The latest agreement is the third currency swap deal South Korea has signed this month in a move to guard against financial turmoil and encourage trade with other emerging markets.
Asia's fourth-largest economy earlier this month struck currency swap deals worth $10 billion and $5.4 billion with Indonesia and the United Arab Emirates, respectively.
With even bigger impact than South Korea, economic powerhouse China has gone on its own binge entering into native currency swap deals with multiple nations - Singapore, Australia, Japan, and even Britain!
China, Singapore to allow direct trading between currencies
SINGAPORE: China and Singapore have agreed to allow direct trading between each other's currency, Singapore's central bank said on Tuesday.Granted, Chinese Renminbi is pegged to the US Dollar right now - to the ire of everyone in whatever little is left of American manufacturing sector. So mathematically under those constraints, it makes little difference if reverse trade with China is in US Dollar or Renminbi. But similar to the point with South Korea above, the main issue is that massive frameworks bypassing US Dollar in the future are being put in place at an alarming rate. One small tremor in uncertainities about US Dollar and voila, it can trigger chain reaction of massive earthquakes. The first prerequisite to such earthquakes could be un-pegging of Renminbi from US Dollar, which is quite conceivable while charting uncertain waters.
The move, along with other agreements on financial cooperation, is expected to bolster Singapore's status as a leading offshore trading centre for the Chinese yuan, officially called the renminbi (RMB).
"China and Singapore will introduce direct currency trading between the Chinese yuan and Singapore dollar," the Monetary Authority of Singapore (MAS) said in a statement, adding that details will be announced separately.
"The new initiatives will further promote the international use of the renminbi through Singapore," the MAS said.
Its managing director Ravi Menon added: "Financial ties between the two countries have deepened considerably and Singapore is well placed to promote greater use of the RMB in international trade and investment in the years to come."
China's rise as the world's second biggest economy has seen the yuan take on a bigger role in international financial markets.
Britain last week said that direct trading between the yuan and the British pound will be allowed.
China also has similar direct trading arrangements for the yuan with the US dollar, the Japanese yen and the Australian dollar.
These are of course logical and rational moves on part of these nations to secure themselves. Considering idiotic debt-ridden baggage associated with every single US Dollar, what else do you expect them to do? Enslave all of their populations to whims of short-sighted greedy bankers in far away lands? Suddenly, the "reserve currency" has started looking like no "reserve" currency at all.
Does the emperor have any clothes?
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