CHINA AND INDIA TAKE STEPS TO DITCH THE US DOLLAR AND TRADE THEIR OWN CURRENCIES

Some recent moves by the governments of China and India have highlighted a growing trend in the global economy: ditching the US dollar for other currencies.
The US dollar has been the world’s “reserve currency,” used for international trade, for decades, but with trade tensions between the US and other countries on the rise, some countries have made moves to reduce their reliance on the dollar and diversify the currencies being used to buy and sell goods across borders.
Most recently, China stepped up its efforts to make the Chinese yuan a major currency for global trade. According to a report at Reuters, China’s State Council is working on a plan to increase the usage of the yuan globally.
The plan will reportedly include targets for the usage of the yuan on global markets, and the Council is also looking at allowing the creation of yuan-backed stablecoins. A stablecoin is a cryptocurrency that is tied to the value of a traditional currency.
Meanwhile, India’s central bank has loosened the rules on the use of the rupee in international trade. The country’s banks will no longer need prior approval to open special bank accounts, known as Rupee Vostro Accounts, that allow foreign banks to do business in rupees.
The moves by China and India come amid ongoing tensions between the US and its trade partners, triggered by President Donald Trump’s move to impose tariffs on goods imported from outside the US.
One impact of the trade war has been a sharp slump in the value of the US dollar. The US currency has fallen by roughly 11% against other currencies since the start of the year, when Trump began his second term in the White House. Currency traders expect that the world will need fewer dollars as trade with the US declines. However, the value of the US dollar still remains within its historical range.