A recent academic paper, co-authored by EBRD’s Chief Economist Javorcik, points to a noteworthy shift in the global economic landscape. The dominance of the US dollar is under threat as yuan-based transactions between Russia and China gain momentum.
Rise in Yuan-Based Transactions
Data from Moscow’s central bank reveals a striking trend: from January 2016 to December 2022. The yuan played a significant role in Russia’s economic interactions. Moreover, it accounted for 34% of Russian imports and 25% of its exports during this period. This surge in yuan-based trade signals the growing sway of the Chinese currency in the bilateral relationship between Russia and China.
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Expanding Influence Beyond Borders
Beyond Russia and China, other nations with swap lines linked to the People’s Bank of China are increasingly adopting the yuan. This growing trend underscores the expanding role of the Chinese currency in global trade transactions. The US dollar’s long-standing dominance faces a formidable challenger as the yuan strengthens its position.
In the aftermath of Western sanctions, the surge in commerce has become a key driver of this transformation. Thus, the yuan gaining prominence in international trade, the world watches closely as the balance of economic power undergoes a significant shift.
Disclaimer: Please note that this article serves solely for informational purposes and should not be construed as financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
