Chinese Yuan Surpasses US Dollar in Russian Trade Amid Geopolitical Shifts

(CTN News) – The Chinese yuan has surpassed the US dollar as Russia’s most-traded currency despite continued genocide in Palestine, according to Watcher Guru.

According to the latest data sources, the yuan accounts for 42% of currency dealings in Russia, while the dollar accounts for 39.5%.

Furthermore, the data reveal that the yuan’s trading volumes have tripled, reaching $385 billion by 2023.

With such widespread use, yuan trading is expected to grow faster this year than last.

Russia is currently facing multiple sanctions imposed by the West, primarily the United States, for its involvement in the ongoing conflict in Ukraine.

The imposed sanctions have created challenges, undermining Russia’s worldwide dominance and rendering it unable to conduct national and international transactions through traditional and established channels.

To avoid these restrictions, Russia has sought other alternatives, such as using the Chinese yuan instead of the US currency to conduct foreign commerce and offshore activities.

Moscow is now escalating its opposition to the usage of the dollar, bringing up the concept of “de-dollarisation”.

During an interview, Russian Prime Minister Mikhail Mishustin asked Middle Eastern oil-producing countries to convert from the US dollar to national and regional currencies.

Historical Context

To understand the magnitude of this achievement, let’s delve into the historical journey of the yuan. From its humble beginnings as a domestic currency, the yuan has steadily evolved into a global player. Its rise can be traced back to strategic economic reforms and internationalization efforts initiated by the Chinese government.

Factors Influencing the Rise

Several factors have contributed to the yuan’s ascent. China’s remarkable economic growth and deliberate efforts to internationalize its currency have propelled the yuan into the spotlight. Bilateral trade agreements and partnerships have played a crucial role in fostering the use of the yuan in cross-border transactions.

Comparison with Other Currencies

Surpassing other major currencies, the yuan’s rise has sent ripples through the financial market. Investors and economists keenly observe its impact on global trade dynamics and the broader economic landscape.

Implications for Global Trade

The yuan’s newfound prominence in international settlements is reshaping global transactions. As more countries engage in trade using the yuan, its influence on the world economy grows. This shift has implications for China and the entire global trade ecosystem.

Challenges and Controversies

However, this rise is not without its share of challenges and controversies. Critics express concerns about the yuan’s stability and transparency, raising questions about its suitability as a global reserve currency.

Future Projections

What does the future hold for the yuan? Analysts and economists provide varying predictions, and understanding these projections is crucial for gauging the potential impact on the global financial landscape.