US Rivals Shunning Dollar Lifts Yuan-Ruble Trading by 1,067%. Volumes between Russian, Chinese currencies near $4 billion
The emerging multi-polar world now includes foreign-exchange markets -- as China and Russia, the biggest challengers to U.S. supremacy, boost direct trading between their currencies.
Monthly volumes on the ruble-yuan pair have surged 1,067% to almost $4 billion since the start of the war in Ukraine as the two nations seek to reduce their reliance on the dollar and boost bilateral trade to overcome current and potential U.S sanctions.
That’s a sign Russians are increasingly turning to Chinese goods to replace stalled Western imports and international brands that have vanished from store shelves. For China, it creates the latest boost for the internationalization of the yuan just when growing tensions with the U.S. are slowing that process.
De-risking From Dollar
Efforts by Russia and China to pursue non-dollar transactions are part of a broader de-risking strategy gaining popularity among several emerging markets.
Saudi Arabia plans to price some oil contracts in the yuan, while India is exploring a rupee-ruble payment structure. Global central banks are diversifying reserves, sparking a drop in the dollar’s share in the holdings to 59% in the last quarter of 2020, the lowest in 25 years, according to the International Monetary Fund.
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