Categories
China will sell $5 billion of US dollar currency and gold to US dollars trader Stephen A. Smith, according to an agreement announced Thursday.
The deal is expected to close in the next two months.
China is the biggest buyer of dollars in the world.
China, which has a huge currency reserves, is the world’s second-biggest gold consumer after Russia.
It is also the largest buyer of gold.
The US dollar is the global reserve currency, and it is used by banks around the world to pay their bills.
The Chinese move will increase trade between the two nations, with a combined total of $3.2 trillion worth of US dollars being traded.
US officials have said they would not be able to do much to stop China from buying dollars from the US dollar market, as the value of the dollar has soared by more than 100 percent since the end of the financial crisis.
China’s decision to buy US dollars comes at a time when the US has been trying to ease the US sanctions on China, a move that has raised concerns that Beijing could be using the dollar to finance its weapons programs in the Middle East.
US Treasury Secretary Jack Lew announced last week that China’s government will no longer need to buy the dollars from American banks, and would instead be able buy them from the government of the People’s Republic of China.
