Summary of the Conference Call on RMB Currencies Industry Overview - The focus of the conference call is on the resilience of the Renminbi (RMB) amid the ongoing Middle East conflict and its performance against the US dollar (USD) and other currencies in the Asian region [2][10]. Key Points and Arguments 1. **RMB's Resilience**: The RMB has shown strong resilience against the USD, outperforming other Asian currencies and most non-USD G10 currencies, indicating its rising status as a global reserve currency [2][10]. 2. **USD-CNY Fixings**: Despite the USD's broad appreciation, the USD-CNY fixings have remained on a modest downtrend, falling from 6.9228 on February 27 to 6.9012 on March 16, with a low of 6.8917 on March 11 [3][18]. 3. **Market Sentiment**: As of March 5, the market was notably bullish on the RMB, with onshore flows skewed towards USD selling, indicating a strong sentiment towards RMB strength [5][10]. 4. **Trade Balance Impact**: The trade balance is manageable, with an oil and gas trade deficit of about 2% of GDP. A 10% rise in oil prices is expected to narrow the monthly trade surplus by approximately USD 3 billion [6]. 5. **Policy Support for RMB Strength**: The Chinese authorities are focused on domestic agendas that support RMB strengthening, including promoting its cross-border use and maintaining stable exchange rates [5][15][17]. 6. **Cross-Border RMB Transactions**: The RMB's share in cross-border transactions has increased significantly, reaching 51% in 2024 and 52% in 2025, up from around 40% in 2021 [15][37]. 7. **FX Conversion Ratios**: The implied net FX conversion ratio for corporates has increased to 66% from 62%, indicating a steady trend in FX conversion practices [12][27]. 8. **Foreign Exchange Policy**: The People's Bank of China (PBoC) has reaffirmed its commitment to maintaining a stable RMB exchange rate while expanding the use of RMB in international trade and investment [15][17]. 9. **RMB Internationalization**: The fifteenth Five-Year Plan emphasizes RMB internationalization, including developing an independent cross-border payment system and enhancing Hong Kong's role as a global offshore RMB hub [16]. Additional Important Insights - **Onshore Market Dynamics**: The onshore market showed net sales of USD 55 billion in February, a decrease from USD 89 billion in January, attributed to fewer working days [11][25]. - **Equity Outflows**: There has been an increase in RMB-denominated outflows, particularly through the Southbound Stock Connect, indicating a shift in investment patterns [13][31]. - **PBoC's FX Assets**: The PBoC's FX assets increased by USD 12 billion in February, reflecting a measured approach to managing RMB appreciation [14][33]. This summary encapsulates the key discussions and insights from the conference call regarding the RMB's performance and the broader implications for the currency's status in the global market.

Core Viewpoint - Russia is signaling a willingness to return to the US dollar settlement system under the condition of lifting sanctions, marking a significant shift from its previous stance of de-dollarization and heavy investment in gold and the yuan [1][5]. Economic Conditions - Russia's economy has been under severe pressure since being excluded from the SWIFT system and facing asset freezes, leading to stagnation with GDP growth dropping below 1% [1][2]. - Inflation remains a persistent issue, with the central bank lowering the key interest rate from 16% to 15.5% but still projecting annual inflation between 4.5% and 5.5% [1][2]. Currency and Trade Dynamics - The official exchange rate of the ruble appears stable, but the black market rate has exceeded 88 rubles per dollar, indicating high costs for currency exchange and restricted cross-border trade [2]. - Russia's energy exports have faced challenges as countries like India and the EU reduce purchases, leading to a significant fiscal deficit and the need for new economic strategies [2][5]. Strategic Adjustments - Returning to the dollar settlement system could drastically reduce the cost of ruble conversion and potentially lead to a sharp appreciation of the ruble, which could negatively impact export revenues [5][7]. - Russia is offering favorable conditions to attract US capital, including opening up key resource projects, indicating a strategic pivot rather than a complete abandonment of previous policies [5][15]. Implications for China-Russia Relations - The shift towards the dollar may temporarily disrupt the yuan's internationalization process, but it is unlikely to lead to a complete breakdown in China-Russia cooperation, which has deepened beyond energy trade into technology and infrastructure [7][17]. - China may gain leverage in negotiations for energy prices as Russia seeks to alleviate economic pressures while navigating Western sanctions [9][15]. Global Financial Landscape - The situation illustrates that de-dollarization is not a binary choice; countries will maintain ties to the dollar for its liquidity while pursuing a multi-currency framework [19][21]. - The evolving dynamics highlight the importance of strategic cooperation and the need for China to optimize its partnership with Russia amidst these changes [21].

Investment Rating - The report does not explicitly provide an investment rating for the industry or the RMB internationalization efforts Core Insights - The People's Bank of China (PBoC) is advocating for the internationalization of the RMB and a multipolar global financial system, emphasizing the need for securing international transactions over enjoying the benefits of a reserve currency [2][8] - Eight new financial policies have been announced to facilitate the opening of China's financial system and promote the use of RMB internationally [3][8] Summary by Sections PBoC's Remarks - PBoC Governor highlighted the tension between self-interest and global public goods, the spillover of domestic policy, and the weaponization of currency in geopolitical competition [2] - The focus is on securing cross-border settlements rather than the "exorbitant privilege" of a reserve currency [2] Financial Policies - The PBoC announced eight financial measures aimed at enhancing RMB internationalization, which include establishing a trade reporting system, setting up an international digital RMB operation center, and promoting RMB FX futures trading [5][6] - The measures also aim to enrich financial products and services in the Shanghai Free Trade Zone and enhance Shanghai's role as a financial center [6][8] Economic Context - The wider international use of RMB is contingent upon a robust economy and progress in capital account convertibility [3] - To restore global confidence in growth, Beijing needs to address deflation and increase the supply of central government bonds [3]