The Chinese Yuan is officially the top most traded currency in Russia surpassing the US dollar by 2.5%. BRICS members China and Russia are settling trade in Chinese Yuan since February 2022 ending dependency on the US dollar. The US pressed sanctions against Russia for invading Ukraine making it harder for the country to trade in the dollar. Making good use of the opportunity, China pushed the Chinese Yuan to settle cross-border transactions by sidelining the US dollar.
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The sanctions against Russia are helping the Chinese Yuan become the de facto currency in the country for trade. BRICS member China is making Russia limit receiving the US dollar for trade and accept only the Chinese Yuan. The ploy plays straight into the idea of de-dollarization initiated by the BRICS alliance. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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BRICS: Chinese Yuan Becomes The Most Traded Currency In Russia, Dethrones US Dollar
The Chinese Yuan accounted for 42% of all the international transactions initiated in Russia from 2023 to January 2024. On the other hand, the US dollar accounted for 39.5% of all cross-border settlements made by Russia during the same period. The US dollar decreased by 2.5% making the Chinese Yuan the most used currency in Russia in 2023-24.
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The Yuan’s trading volume with Russia tripled due to the sanctions reaching $385 billion in trade in a year. Simultaneously, the US dollar’s trading volume in Russia reached $560 billion in the same period. However, the US dollar is still in competition and not too far away from the Chinese Yuan.
Russia and China are the top countries in BRICS that are using the Chinese Yuan and not the US dollar. Both countries are advancing in their de-dollarization motives and aiming to boost local currencies by dethroning the US dollar.