The de-dollarization of trade between Russia and China has reached a significant milestone, with the share of the US dollar in bilateral settlements hitting a historic low. This development was disclosed by Georgy Zinoviev, the director of the Russian Foreign Ministry’s First Asian Department.
According to Zinoviev, the share of national currencies in Russian-Chinese payments has seen a rapid increase over the past two years. He stated that at the start of 2022, the share was approximately 25%, but it has now surpassed 80%. This indicates a substantial reduction in the dominance of the greenback in their trade transactions.
In addition to the growing share of national currencies, Zinoviev highlighted that the trading volume of the ruble-yuan pair on the Moscow Exchange has already exceeded that of the dollar-ruble pair. This further demonstrates the shift away from Western currencies towards more reliable and secure alternatives like the ruble and yuan.
The move towards de-dollarization comes as Russia seeks to distance itself from transactions involving the currencies of “unfriendly countries” amidst the backdrop of economic sanctions. Finance Minister Anton Siluanov echoed these sentiments, expressing that the country no longer considers the dollar as a reliable instrument.
Zinoviev emphasized the importance of developing tools and mechanisms to facilitate smooth transactions between Russia and China, despite challenges posed by international political and economic instability. These tools aim to ensure the efficiency and reliability of financial institutions in the face of external disruptions.
These developments signify a significant shift in the economic relationship between Russia and China, as they increasingly rely on their national currencies for bilateral trade. The growing use of the ruble and yuan reflects a mutual desire to reduce dependency on the US dollar and strengthen economic cooperation between the two nations.
In light of these changes, discussions surrounding trade, business, and investment will take center stage at the upcoming 8th Eastern Economic Forum in Vladivostok, Russia. The forum serves as a platform for leaders and entrepreneurs from Russia and Asia-Pacific countries to engage in fruitful dialogue and explore opportunities for collaboration.
In conclusion, the de-dollarization of trade between Russia and China has reached a significant milestone, with the share of the US dollar hitting a historic low. The growing use of national currencies reflects the two nations’ desire for more reliable and secure payment methods. This shift away from Western currencies highlights the importance of developing tools and mechanisms to facilitate smooth transactions despite external disruptions. The upcoming Eastern Economic Forum will provide an opportunity to further discuss and expand the economic cooperation between Russia and Asia-Pacific countries.
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