The US dollar’s dominance is being threatened by an increasing shift towards yuan-based transactions between Russia and China, as per a recent academic paper co-authored by EBRD’s Chief Economist Javorcik. This development is primarily due to the aftermath of Western sanctions that have driven a commerce surge between the two nations.
According to data from Moscow’s central bank, from January 2016 to December 2022, the yuan accounted for 34% of Russian imports and 25% of its exports. This significant shift indicates the growing influence of the Chinese currency in bilateral trade between Russia and China.
In addition to this, third countries that have swap lines with the People’s Bank of China are increasingly using the yuan. This trend further underscores the expanding role of the Chinese currency in global trade transactions, which can potentially undermine the longstanding dominance of the US dollar.
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