Russia - China Trade Ditches The US Dollar As Currency Of Choice For Transactions

Russian trade in US dollars has now dropped below 50% with continued trend expected.

A significant amount of the drop of usage of the US dollar was in trade with China. Around 75% of all Russia - China trade is now transacted with the Euro with Russia’s share nearing 40% Euro transactions, a dynamic trend also expected to continue.

Trade between the two countries transacted in rubles and yuans has risen to about 25%, up dramatically from 2% just over 5 years ago.

All of this is due to a concerted effort by the two countries to ditch the US dollar in trade. Russia has also ceased its purchases and reduced its holdings of US debt, opting to invest in gold and the Euro instead.

Russian Deputy FM Alexander Pankin: “Unpredictable American economic policy call into question the reliability and convenience of using American currency as the priority of deals. States are now being forced to take measures against the risk of economic losses and uncertain transactions. Therefore, there is increasing interest in developing alternative mechanisms. Using other currencies in trade is becoming more and more important on the international agenda.”

Russia and China are also developing an international banking network to process transactions and act as an alternative, and eventually a rival, to SWIFT.

Russian FM Lavrov: “We need to move away from the use of western controlled international payment systems. Our [Russia and China] respective fiscal authorities, financial institutions, and the central bank will expand its application. We will take the steps to prevent our economies from being exposed to threats from unfriendly nations.”

From RT, Bank of Russia, Bank of China