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Video: Chinese media: why did Russia buy 80 billion yuan?
2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55
One of the main measures was efforts to de-dollarize the economy, and this is being done with the help of the yuan, says Sohu (Sohu, China). The Chinese believe that the time is approaching when the Chinese yuan will be at the center of the global financial arena.
Sohu (China): Russia is actively pursuing de-dollarization and bought 80 billion yuan from China - why should it?
Contrary to European expectations, the Russian economy is not in dire straits. On the contrary, it has a favorable development trend. A number of reasons contributed to this, but the basis is the adoption of measures to de-dollarize the domestic economy.
It is known that the most important export products of Russia are oil and natural gas, and China is one of the main buyers. Prior to that, in trade between the two countries, all settlements were to take place in dollars, but since last year Russia began to actively promote the use of the yuan in energy trade between Russia and China. In particular, China has already begun to develop a system of cross-border payments in yuan called CIPS, which is able to bypass the SWIFT system, where the main currency is the dollar. CIPS allows both parties to a trade to directly use the RMB for international payments and settlements.
According to statistics provided by the customs of both countries, the share of imports of Chinese goods using the yuan in Russia has now increased to 15%, and four years ago, in 2014, it did not even reach 5%. Despite this, the use of the yuan in trade deals between China and Russia is growing steadily.
Getting started is always difficult. The rate of expansion of the area of using the yuan for settlements is becoming faster. It is noteworthy that following the increase in the share of the yuan in trade and economic relations of both countries, its share also begins to grow in Russia's own foreign exchange reserves. According to officially published Russian data, the Central Bank of the Russian Federation is reducing the share of the dollar and the euro in foreign exchange reserves, increasing the Chinese yuan.
Over the past three years, the number of assets with the involvement of the yuan has increased fivefold and is now 5%, only in the second half of last year, the Central Bank of the Russian Federation made a large purchase in the amount of 80 billion yuan, thereby replenishing its foreign exchange reserves. In contrast, the share of the dollar in Russia's foreign exchange reserves is continuously decreasing, and now it does not even reach 44%, that is, for the first time it is less than half.
We can say that the share of the yuan is still too small, and the dollar is still eight to nine times the yuan. However, it should be borne in mind that the yuan is now at the stage of internationalization, and this is not just a slogan. For the RMB held in the hands of foreigners, there must be reliable investment channels. Major international commodities require markets where renminbi-based pricing is used.
We have now launched RMB iron ore and oil futures, an international payment system whose currency is the yuan. All this shows that the Chinese monetary standard already fulfills the objective conditions for internationalization and transformation into the main settlement currency in the world. For a long time, the United States, due to the domination of its own dollar, exerted tremendous pressure and cut off oxygen to other countries, but now it is facing a serious challenge. Currently, not only the yuan, but also the euro is preparing its own system of international payments.
Countries such as Iran, Turkey, Venezuela have already abandoned the use of the dollar for international trade settlements. Now, in addition to the dollar, each country has a much larger choice of currency for making payments, and this trend is becoming more pronounced. We believe that the time is not far off when the Chinese yuan will be at the center of the global financial arena.
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