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Yuanization of imports: is it business to save today in yuan?

Yuanization of imports: is it business to save today in yuan?

In recent times, the yuan has established itself in the Argentine economic scenario as an alternative to the dollar, but it is not an option for everyone. Can you save the yuan? These warnings give some analysts in this regard.

As a result of the swap with China and the news that the commercial exchange with that country will be carried out in yuan without going through the dollar, that oriental banknote was located in the center of the Argentine economic scene. Some analysts even spoke of “yuanizing” the economy as an alternative to the proposal to dollarize it, which certain sectors of politics wanted to install as a possible solution to inflation and the devaluation of the peso. There is so much noise around chinese currency sign these days some savers may begin to see in it a possible “currency of the future” and, given that the “Asian giant” is the second largest economy in the world, many see it as a strong currency and have considered the possibility of buying it as a possible investment for protect their savings from local instability.

However, that is not currently a possibility for the local saver. And it is that, as explained by Gustavo Quintana, from PR Operadores de Cambio a Ámbito, “the yuan is not a currency that is traded on the local market”. Access is only enabled for payment operations for imports from China through the Central Bank (BCRA) through the swap. Thus, he points out that “it is not a currency that serves to save or support” in the country.

And, in this sense, it is very important to take into account that, as indicated by the economist Federico Glustein, “one of the functions that a currency must have is its transactionality” and he warns that, in our country, this still does not happen with the yuan, given that, as noted, there is no supply and, if there were, for the moment, it would still be marginal. Thus, although he does not rule out that, in the future, it may move towards a transactionality of the yuan in Argentinafor the moment, is not a given condition.

The yuan and the dollar in the world and its local projection

And, in this sense, it is worth mentioning that more and more cooperation with aligned countries such as Brazil, Russia, India and some of Europe so that the yuan begins to penetrate the economies. In fact, years ago, the participation in world trade of that currency barely exceeded 1% and, today, it is almost 5%. However, everything would indicate that the possibility of it replacing the dollar in commercial matters is far away, much less as a savings instrument.

On the other hand, it is interesting to know that, as reported by Glustein, “China is the world’s largest dollar holder with nearly $900 trillion”, therefore, he believes that “it seems that even the Chinese themselves trust the US currency more than their own currency for international transactions”.

Why not buy yuan?

Of course, some unscrupulous person can always appear offering yuan in some corner of the City or in some cave in the country, but the economist Juan Valerdi warns that accepting this transaction would be a great imprudence for the following reasons:

  • In the first place, he points out that, “surely, the price at which they want to sell them to us is infinitely higher than the amount we can obtain when we want to get rid of those bills”.
  • It also warns that the yuan is very little known and that it could only be obtained on the black market, not only because there is no local supply in legal circuits, but also because of the current restrictions on access to foreign currencies, and that exposes the person who is going to buy to being given counterfeit bills Very easily. And it is true that “people practically do not know the color or the design,” says Valerdi.
  • And, third, it considers that taking into account that the trade and geopolitical war that is taking place today between the United States and China It could escalate and Valerdi warns that, in that case, the yuan would surely become a rejected currency in places where the northern country has a lot of influence, such as Latin America.

The concrete thing is that, although it seems that, currently there is no massive interest in saving in yuan in Argentina, some banking entities and financial advisers have received some isolated inquiries about the possibility of making investments in recent times. But, as the analysts and experts consulted explain, it is not a currently viable idea in Argentina.

In the words of Valerdi “it is an investment option as exotic as it is dangerous”. Above all, taking into account that there are many safer and more reliable options to consider beforehand, such as dollarized assets, others tied to the evolution of inflation or those that guarantee a regulated rate.

Source: Ambito

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