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the year before last, due to the crazy interest rate hikes in the united states, the rmb exchange rate quickly depreciated, causing the offshore rmb exchange rate to reach a level of 7.37. after this rapid decline, i made a judgment that this was already the highest point. so far it has been like this for two years now.

recently, the offshore rmb exchange rate directly broke through the 7 mark in the context of the federal reserve's interest rate cut, which means that this round of depreciation of the rmb has ended and returned to the normal track again.

however, there is much more to it than that.

this question starts with the us dollar - there are two definitions of a strong us dollar. one is fx strength, i.e. how it compares to another currency (yen, yuan, euro). the second definition of a strong dollar is its absolute dominance. the entire global financial system is based on the us dollar. this gives the dollar a lot of strength and power, which is another definition of a strong dollar. the appreciation of the rmb i am talking about mainly refers to the second situation.

what the world needs now is not to replace the u.s. dollar, which will be difficult to do for a long time, but to serve as a reserve currency with non-u.s. dollar power in case of emergencies.

therefore, rmb appreciation is necessary, which once again illustrates the stability of rmb assets, which is very important for the internationalization of a currency.

after all, after russia was sanctioned by the united states, many countries were mentally prepared and found ways to avoid it, even if they did not take any major actions. of course, no matter how the united states uses dollar sanctions, it cannot make russia bow its head and retreat.

it was said before that after the united states increased financial sanctions, it affected the trade between china and russia to a certain extent, but russia has a new idea - to find an "intermediary."

according to bloomberg, more and more russian banks and companies are choosing to carry out foreign exchange business required for payments with china in kazakhstan.

data from the central bank that monitors local currency transactions shows that from june to august, the average monthly trading volume of the tenge against the yuan and the russian currency reached 893 million yuan ($127 million) and 86 billion rubles ($925 million) respectively, compared with that more than doubled in the first five months of the year.

in a written response to questions, astana's central bank said it was related to the suspension of u.s. dollar trading on the moscow exchange. the bank also said it would maintain dollar trading growth of 50% annually this year due to "increased economic activity and trade" in the country, which shares borders with china and russia.

admitted!

data from the kazakhstan stock exchange shows that from june to august this year, the exchange’s total rmb-usd cross-trading transactions were us$1.63 billion, an increase of approximately 33% from us$1.23 billion in the same period last year.

it can be seen that there are more solutions than difficulties. moreover, even the "intermediary countries" know the "danger" of the us dollar, and it is reasonable to take precautions before they happen. after all, there may be a large number of non-us currencies helping each other in the future.

it is worth mentioning that with the abuse of u.s. financial sanctions and the shortcomings of the "dollar debt trap", the appreciation of the rmb will definitely be valued by more and more investors.

of course, in the long run, the status of the u.s. dollar will not really decline soon. after all, the "fall" of the british pound took a long time to happen - in the 1880s, the united states surpassed the united kingdom in terms of economic size, but after the two world wars, it was only after 1944 that the dominant currency of the pound became history.