For the first time ever, the Central Bank of Iraq stated that it intends to carry forward trade from China and settle transactions in yuan. The US dollar was the dominant currency in international trade. However, in a recent statement to Reuters, Iraq’s central bank stated that trades will be settled in yuan rather than US dollars.
JUST IN: 🇮🇶 Iraq’s central bank to allow trade with China to be settled in Chinese yuan instead of US dollars.
— Watcher.Guru (@WatcherGuru) February 22, 2023
Saudi Arabia’s finance minister stated last month that his country is willing to settle trades in currencies other than the US dollar. The vision of Iraq’s central bank is to improve access to foreign currencies.
“It is the first time that imports from China will be financed in yuan, as Iraqi imports from China have previously only been financed in (US) dollars,” said Mudhir Salih, Iraq’s economic adviser.
Iraq’s decision will boost the yuan’s role internationally
China has been in economic turmoil for several years as a result of the COVID pandemic and its consequences. According to a recent Bloomberg article, the People’s Bank of China injected nearly $92 billion into the market.
China has slowed cryptocurrency adoption by prohibiting cryptocurrency mining and trading. As Chinese money is being deployed into the market, several analysts have begun to speculate on another cryptocurrency bull market. This is evident in the significant gains made by China-based cryptocurrencies such as Conflux, Flamingo, and Neo.
