Monday, October 29, 2018

Dollar dumping continues as Japan signs its second non-dollar bi-lateral currency agreement within a week

A week ago, Japan became the newest economy to join the ongoing global de-dollarization movement when they signed a bi-lateral currency agreement with China.  Now just a few days later, they are doing the same with the world's fifth largest economy.

India and Japan on Monday concluded a $ 75 billion bilateral currency swap agreement to provide greater stability in foreign exchange and capital markets in the country. This swap arrangement is 50% higher in value than the last swap agreement signed between the two countries in 2015.  
This is the second big currency swap agreement between Asia’s two biggest economies after Beijing and Tokyo signed $30 billion currency swap arrangement last Friday, aimed at enhancing financial stability and spurring business activities in both countries. 
"This bilateral swap reflects the depth of our deeper economic relationship," India's Minister of Finance Arun Jaitley said after the sealing of the agreement during Indian Prime Minister Narendra Modi's visit to Tokyo for the Indo-Japan annual summit. 
India, Japan, and China signed the currency agreement against the backdrop of trade tariff war initiated by the US President Donald Trump early this year. The three countries also trimmed their ownership of US treasury bonds since the beginning of trade war. The Reserve Bank of India (RBI) has sold US treasury bonds worth $16.3 billion since April, with the country's stock plummeting to $140 billion in late August. - Sputnik News
Even before President Trump began his new tariff policy, coalitions such as the BRICS nations have been planning de-dollarization for at least five years now.  And with the global economy looking like it is headed towards another recession or perhaps even a potential collapse, few want to be relying upon the unipolar reserve currency in light of what happened to the Middle East during the Arab Spring eight years ago, or in anticipation of what may occur once sanctions become fully reenacted against Iran in November.


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