Wang Qiang has graduated from elementary school, so he certainly has no idea about this question: "Is China the RMB swap agreement mentioned earlier?"

Su Su smiled and said, "Yes, I have said this word several times, so I will explain it now. First of all, because the US dollar is an international settlement currency, the US dollar can harvest whatever it wants through exchange rates and interest rates. China, a big country that has worked hard for many years, has been unable to bear it, let alone those small countries with few US dollar reserves and are in a panic all day long."

"However, China cannot directly say that the RMB will become an international reserve and settlement currency. First, the world does not recognize it, and second, it will be suppressed by the joint efforts of Europe and the United States, so it must be played secretly. So Brother Qiang listen, the specific gameplay is as follows:-"

Wang Qiang was excited: "Yeah, listen!"

Su Su smiled and said, "First of all, find a victim who dares to be angry at the US dollar but dares not speak out. For example, Zimbabwe! That's all you."

Wang Qiang laughed out loud.

Su Su smiled and said, "I'm making an example. Zimbabweb's situation is very special and it is also the first country in the world to use RMB. It's very stingy. In short, China found this old African friend to comfort me - it's indeed a terrible thing to have no US dollars. Although I have too many US dollars, I'm also afraid of such a US dollar. We will help each other with currency exchange. When you don't have US dollars, you can exchange US dollars with RMB. When I don't have US dollars, I will exchange US dollars with Zimbabwean coins. At the current exchange rate of 1 US dollar = 6 RMB = 1000 trillion Zimbabweb coins--"

Wang Qiang could no longer help laughing wildly: "I feel like Qingming Festival is here!"

Su Su smiled and said, "Don't interrupt, in short, China and Zimbabwe have signed a currency swap agreement with a total amount of US$100 million. China gave Zimbabwe 600 million yuan at the exchange rate, and Zimbabwe gave China... 1 trillion yuan of Zimbabwean coins. That is, when Zimbabwe lacks US dollars, it uses the RMB China gave him to exchange for US dollars, and at most US$100 million. On the contrary, China will burn paper to ask him to exchange for US$100 million. Brother Qiang, have you seen something?"

Wang Qiang couldn't laugh: "Zimbweb is so poor, it is impossible for China to burn paper to ask him to exchange for US dollars, right?"

Su Su nodded: "Yes, this is obviously China's concessions, and he has no room for rejection. But this is not the point. The point is whether the swap rule is or whether the two sides trade US dollars at the exchange rate, or use US dollars as hard currency, and it does not challenge the status of the US dollar. The United States cannot see any problem."

Wang Qiang came to his senses: "What about?"

Susu laughed and said, "Then? Zimbabweb's neighbor South Africa is also an old friend of China!"

"South Africa!" Wang Qiang wanted to laugh again.

Su Su smiled and said, "South Africa has become like this. Even a stupid pig knows something is wrong, but he dares not speak out. Then everything is indifferent. China and South Africa also signed a currency swap agreement of 1 USD = 6 RMB = 13 South African Nantes at the exchange rate. Then China gave South Africa 600 million RMB and South Africa gave China 1.3 billion South African Nantes. Is there any problem?"

Wang Qiang was increasingly looking forward to it: "The situation is no different from Zimbabweb? No problem!"

Susu laughed and said, "Then, the following good show comes. Although South Africa is not developed, it is much better than Zimbabwe next door. When Zimbabwe is out of stock and food, he can only find South Africa to buy nearby. What to buy? It cannot be Qingming paper money. No one in the world recognizes this thing except China, so he can only buy it in hard currency US dollars! Zimbabwe was harvested again and there is no US dollar, so he came to China to exchange for US dollars according to the agreement. No problem! But he has to fill out the form, review, wait, wait..."

Wang Qiang felt the show flesh: "I'll just pull it, then what?"

Su Su laughed and said, "Then it makes people feel troublesome!"

Wang Qiang browed: "Why should I be so troublesome? Both countries have 600 million yuan in their hands, so I can just trade it in RMB!"

Su Su clapped her hands and smiled and said, "The answer is correct! Anyway, the RMB can be exchanged for US dollars at any time. Why bother so much every time? Just trade it in RMB - Brother Qiang! Did you see it?"

Wang Qiangwu: "The RMB has replaced the US dollar and has become the currency in circulation between the two countries!"

Su Su smiled and said, "By the way, this kind of RMB circulating in foreign markets is called offshore RMB. This word has never been heard before. It has become popular in the past two years. There are 200 countries in the world, and China has signed RMB swap agreements with more than 30 countries, mainly SCO countries. The RMB has become the circulating currency of Central Asia. This is the internationalization routine of the RMB - the US dollar dares to play back and harvest? The RMB will immediately take advantage of the opportunity to squeeze its circulation status!"

Wang Qiang suddenly realized: "I understand! But if the RMB can take advantage of the situation, then what euro?"

Su Su laughed and said, "There are three conditions for the RMB to become an international currency: First, the RMB is denominated. When the African black uncle bought a pack of instant noodles and toilet paper, he asked how much it costs. If you answered 10 yuan, he would know that you were talking about RMB, not US dollar and euro. How to do it? That is, China is the world factory and can produce everything! Only by producing everything, you have the ability to price everything! The United States cannot produce instant noodles. European men cannot compete with China for instant noodles with high wages and benefits. If they cannot deliver it, the black uncle will also feel it is troublesome and will not denominate the US dollar and euro."

"Second, RMB settlement! That is, the CIPS, the cross-border settlement system mentioned earlier, is equivalent to bank transfer, but it is simple to say, but it is much more complicated to make this system than the usual bank transfer. As I said before, Europe does not have this system, and uses the US SWIFT, and the network will be cut off by the US at any time. So after the trade war, Europe decided to develop a system to connect with China within the past six months."

"Three, becoming the mainstream international reserve currency, currency swap is just a foundation. The scale is not enough. How to make the RMB reserved by other countries on a large scale? This has something to do with the response to the US dollar interest rate hike this time."

Jiang Gan began to recite: "———On June 15, CCTV2 Finance Channel reported that on April 17 this year, in order to prevent the risks of economic growth, the central bank issued a policy to reduce the reserve requirement ratio by 1% for the five major banks, releasing about 1300 billion yuan in credit scale..."

Su Su smiled and said, "Brother Qiang, have you heard it? The reserve requirement ratio is cut! It means that the bank will not save so much money. 1% is more than 1 trillion yuan. This is the scale! This is the rhythm of the RMB going to release money to the whole world and fill the gap in the return of US dollar interest rate hikes."

Jiang Gan continued to recite: "On June 14, the financial news "The Federal Reserve raises interest rates and the Central Bank remains unmoved"... the central bank carried out a reverse repurchase operation of 150 billion yuan."

Su Su smiled and said: "Reverse repurchase operation is what I just mentioned to repurchase treasury bonds. The state buys back the treasury bonds from the hands of the people. This is the rhythm of China continuing to collect ammunition and preparing to release water."

Wang Qiang nodded and realized: "But, the US dollar has raised interest rates after all! The domestic dollar will definitely run away, and China just doesn't follow it. Isn't that hurting each other?"
Chapter completed!