Full article (not long):
http://www.businessinsider.com/nigeria-introduces-yuan-into-into-forex-reserves-2011-9They plan to move 5-10% of their reserve currency into Yuan in Q4. Notably, this will be done in part through making oil trades with China denominated in Yuan rather than dollars. Nigeria is a significant player in the oil market. Not the largest, certainly, but I would imagine in or around the top 10. For them to start trading oil in anything other than dollars (even if it's only in part) could signal the start of something very ugly for the dollar.
Another aspect of the deal is, as you might imagine, Nigeria buying Chinese treasury bonds. To quote the article:
Quote:
and governor Sansui said he prefers holding yuan over gold, according to Bloomberg.
Right or wrong, this is an attitude that a lot of people have held about the dollar in the past. It has a lot to do with why the dollar became not just "an" but "the" international exchange currency in the first place, and has allowed the U.S. to frankly get away with a lot of things that other countries couldn't, monetarily and economically speaking. One country isn't a trend, but then you should also take a look at the last link the article. There's also been a certain amount of talk about adding the Yuan to the IMF reserves. In any case, we're not talking about the Yuan totally eclipsing the dollar as a reserve currency over night, but to any extent that it crowds out the dollar, it's going to make matters worse for the U.S. on several fronts.
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