Expert Chaslau Koniukh
  • Biography
  • Analytics
  • Companies and corporations
  • Global investment
  • Investors and Entrepreneurs
  • Market terminology
  • Stock Market
  • World exchanges
abandoning the dollar

China and Russia are gradually abandoning the dollar

29.01.2021
2 min read

Giving up the dollar: why do Russia and China switch to national currencies?

Against the background of a trade conflict between the United States and China, Beijing decided to reduce its dependence on the dollar. In this matter, China also supports Russia, now the countries will carry out calculations in yuan. The renunciation of the dollar is carried out in stages, so that it would not be a great shock to the economies of the states.
Beginning in 2015, the share of U.S. currency in trade between Russia and China is gradually declining. And if then in dollars were about 90% of all operations, now this share is 50%. In the first quarter of last year, about 30% of payments were made in euros, national currencies – rubles and yuan, accounted for 24%.
Russia and China maintain a balance of export and import supplies. In 2019, Russia sold to China products for 56 billion dollars, and bought for 54 billion dollars. This ratio in trade helps to solve the problem of dependence on the American currency. The fact that such a balance reduces the need for countries to use other money than their own.
Experts note that the main factor in the rejection of the dollar is the pressure from the U.S., both on China and Russia. U.S. sanctions are growing, which limits the countries in development. In addition, dollar payments are made through U.S. banks, which further aggravates the situation. Tense relations affect transactions, and are a lever of control for the White House. Analysts believe that it is convenient to use national currencies for trade between China and the Russian Federation, excluding intermediate options. It will also strengthen the rouble and the yuan in the domestic market by increasing demand for them.

abandoning the dollar

China now needs to strengthen the national currency at the global level, expanding its use for settlements with other countries. In the case of the ruble, there is a high volatility, which does not allow money to achieve some success in the global market.
In 2014, China and Russia entered into an agreement for 3 years, which implied the creation of foreign exchange swap for a total of 150 billion yuan (24.5 billion in dollar equivalent). This deal allowed countries to exchange currency without making additional purchases on the foreign exchange market.
However, not all settlements were made in rubles or yuan. For example, purchases of oil and gas are made in euros, which is explained by its high liquidity, as well as by the dollar. It should be noted that euro settlements are growing on the world market, but the dollar still holds leading positions.

Share
0
Previous Post Will there be a new stock market crash: forecast from the US Federal Reserve Next Post Chinese technology corporations have entered the main index of Hang Seng Hong Kong Stock Exchange

You Might Also Like

US oil industry
Analytics
US oil industry shows signs of growth: Rystad review
06.09.2020
Chaslau Koniukh
Analytics
Chaslau Koniukh: trade war with China and its risk for the world market
03.07.2020
slow recovery
Analytics
The oil market continues its slow recovery
20.12.2020
rally in the market
Analytics
Experts: it’s too early to talk about a rally in the EM market
31.10.2020
expert Chaslau Koniukh
Analytics
Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.
30.05.2020
OFZ market
Analytics
What does the OFZ market expect in the next quarter
16.10.2020

Recent Posts

  • 1Wendy Deng
    Wendy Deng: How a poor Chinese girl became one of the most powerful women in the world
    25.02.2021
  • 2PNC Financial Services Group
    Financial Corporation PNC Financial Services Group
    24.02.2021
  • 3Evraz plc
    S&P Global Ratings analysts downgraded rating for Evraz plc
    23.02.2021
  • 4Anti-Martingale
    Anti-Martingale strategy and its implementation in the Forex market
    22.02.2021
  • 5oil exports to China
    Oil exports to China increasing: reasons for the growth in volumes
    21.02.2021

Popular Posts

  • How foreign investments are distributed in the world 0
  • Strong economies: development and prospects for Iceland 0
  • What to do when the stock exchanges are falling: analyze the fall of the indexes 0
  • Automobile concern Fiat Chrysler Automobiles: plans to merge with Peugeot Societe Anonyme 0

Social

Editor's Picks

Chaslau Koniukh

American bankers from JPMorgan and Goldman Sachs advise to invest in gold: review by Chaslau Koniukh.

Spokesperson
17.08.2020
Expert Chaslau Koniukh

Chaslau Koniukh on the analysts’ opinion on the key stake size change soon

Spokesperson
18.06.2020
expert Chaslau Koniukh

Chaslau Koniukh: Internet trade market in Russia may reach 2.78 trillion rubles.

Spokesperson
30.05.2020
Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Will the U.S. oil shale industry be able to quickly recover from the crisis: A Review by Chaslau Koniukh

Spokesperson
16.05.2020

Latest Posts

China's economic recovery
How China’s economic recovery is going: a review of the processes
26.02.2021
Wendy Deng
Wendy Deng: How a poor Chinese girl became one of the most powerful women in the world
25.02.2021
PNC Financial Services Group
Financial Corporation PNC Financial Services Group
24.02.2021

Chaslau Koniukh

Expert Chaslau Koniukh

Chaslau Koniukh is an international financial expert, a professional investor, an experienced analyst and a practicing trader. He advises European entrepreneurs; holds lectures on investment topics; is the author of scientific articles on work at the stock market.

Recent Posts

  • 1China's economic recovery
    How China’s economic recovery is going: a review of the processes
    26.02.2021
  • 2Wendy Deng
    Wendy Deng: How a poor Chinese girl became one of the most powerful women in the world
    25.02.2021
  • 3PNC Financial Services Group
    Financial Corporation PNC Financial Services Group
    24.02.2021
Expert Chaslau Koniukh
  • Facebook
  • Twitter
  • Youtube
  • Instagram
  • Biography

Expert Chaslau Koniukh: brief biography and path of formation

Let’s Socialize