{"id":226316,"date":"2023-01-02T12:00:45","date_gmt":"2023-01-02T12:00:45","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=226316"},"modified":"2022-12-30T04:28:48","modified_gmt":"2022-12-30T04:28:48","slug":"russia-dropping-us-dollar-for-chinese-yuan-and-fast","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2023\/01\/russia-dropping-us-dollar-for-chinese-yuan-and-fast\/","title":{"rendered":"Russia Dropping US Dollar for Chinese Yuan \u2013 And Fast"},"content":{"rendered":"

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26 Dec 2022 – In response to Western sanctions, Russia\u2019s central bank is dropping the US dollar and will buy Chinese yuan on the foreign exchange market. The yuan\u2019s share of Moscow\u2019s currency trading increased from 1% to 40-45% in 2022, while dollar trade halved from 80% to 40%.<\/em><\/p><\/blockquote>\n

Russia has spent years trying to decrease its dependency on the US dollar<\/a>. But especially since the escalation of the proxy war in Ukraine<\/a> in 2022, Moscow has accelerated its drive toward de-dollarization<\/a>.<\/p>\n

Western sanctions have locked Russia out of the US-dominated international financial architecture. Numerous Russian banks were disconnected from the SWIFT inter-bank messaging system. Washington and Brussels even froze a staggering $300 billion of the Russian central bank\u2019s foreign exchange reserves.<\/p>\n

In response, Russia\u2019s central bank has largely abandoned the US dollar and euro, and instead it plans to buy Chinese yuan on the currency market.<\/p>\n

httpv:\/\/www.youtube.com\/watch?v=ffFseEPa62M&t=1s<\/p>\n

In the span of less than a year, the yuan has quickly replaced the dollar as the most sought foreign currency in Moscow.<\/p>\n

According to the Federal Reserve, the US dollar is involved in around 80% of global trade<\/a>, and the dollar makes up approximately 60% of globally disclosed official foreign reserves, as of 2021.<\/p>\n

But rising geopolitical conflict, fueled by Washington\u2019s new cold war<\/a>, has pushed Russia, China, Iran, and a growing list of countries to try to de-dollarize, or at least to diversify their foreign reserves.<\/p>\n

Reuters reported that daily \u201cyuan-rouble trading volumes<\/a> on the Moscow Exchange are already exceeding dollar-rouble trades on some days,\u201d and noted that this trend is likely to increase in 2023.<\/p>\n

Russia has already made importers of its oil and gas pay in its currency, the ruble<\/a>, in a challenge to the petrodollar.<\/p>\n

An anonymous source in Russia\u2019s banking system told Reuters, \u201cThe central bank can currently now buy yuan,\u201d and, \u201cif next year budget revenues from the export of oil and gas exceed 8 trillion roubles, then the central bank will buy yuan.\u201d<\/p>\n

Another anonymous source in the Russian government said to Reuters, \u201cWe have a lot of friendly currencies. On the exchange, the Chinese yuan is the most traded currency, it is the friendliest currency so far.\u201d<\/p>\n

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With the conflict in Ukraine and Western sanctions on Moscow shutting Russia's banks and many of its companies out of the dollar and euro payment systems, China\u2019s yuan has swept into the country's markets, presenting an economic counterweight to the dollar https:\/\/t.co\/3OsuyJqsEt<\/a> pic.twitter.com\/bJvcPUNvYW<\/a><\/p>\n

— Reuters (@Reuters) November 29, 2022<\/a><\/p><\/blockquote>\n