Singapore will become one of the prime locations where Chinese institutional investors will be able to buy foreign securities with yuan. The limit for currency trades by financial institutions in Singapore that invest in China’s domestic securities was reported to be at 50 billion yuan ($8.2 billion), according to the Renminbi Qualified Domestic Institutional Investor program.
“Financial ties between the two countries have deepened considerably and Singapore is well placed to promote greater use of the RMB in international trade and investment in the years to come,” MAS Managing Director Ravi Menon said in the statement. RMB stands for renminbi, which is the official name of the Chinese currency.
So what does this mean for the US Dollar? Well it literally signifies that prominent financial locations such as London, Singapore and Mumbai are devising plans to bypass the Dollar as the world reserve currency, and are working to trade their currencies directly, by making their countries an offshore hub for the Chinese yuan.