In a time when many nations have gone public with their intention to ditch the dollar in part or in whole, in bilateral trade with non-US counterparts, either to prevent the US from having “veto power” of commerce courtesy of SWIFT or simply in response to Trump’s “America First” doctrine, attention has long focused on Russia and China – the two natural adversaries to the US – to see if and when they would accelerate plans for de-dollarization.
To be sure, the two nations wouldn’t be the first to reduce their reliance on the dollar, as we have discussed in recent months:
- Europe Unveils “Special Purpose Vehicle” To Bypass SWIFT, Jeopardizing Dollar’s Reserve Status
- Russia Says Time Has Come To Ditch The Dollar
- European Powers Prepare To Ditch Dollar In Trade With Iran
- Russia And India Ditch Dollar In Military Deals
- Russia Finance Minister: We May Abandon Dollar In Oil Trade As It Is Becoming “Too Risky”
- Venezuela Ditches US Dollar, Will Use Euros For International Trade
However, when it comes to symbolism and optics, no other pair of nations would have as much an impact in dumping the dollar as (quasi) superpowers China and Russia. Which is why we found it a material development when Russia’s Ministry of Economic Development said on Thursday that Moscow and Beijing are working on an inter-governmental agreement to expand the use of the ruble and yuan in mutual trade settlements.
“The document is currently being prepared, the process is not easy,” said Deputy Minister of Russia’s Economic Development Sergey Gorkov, as quoted by TASS. “Russia and China have had some experience of using national currencies in bilateral trade.”
So how has dedollarization worked out so far in bilateral trade between the two nations? According to RT, in 2017, 9% of payments for supplies from Russia to China were made in rubles; while Russian companies paid 15% of Chinese imports in yuan. While the numbers seem modest, consider that just three years ago, the numbers were 2% and 9% percent, respectively.
And with Trump sure to continue antagonizing Beijing (and Moscow) for the next two years (at least), it would hardly be surprising if by the end of Trump’s first term, approximately half of Russian-China trade is denominated in currencies other than the dollar.
Full article: Russia And China Prepare To Ditch Dollar In Bilateral Trade (ZeroHedge)