Sanction game payoff: US dollar losing its luster in Russia’s foreign trade
Russia has managed to reduce the use of the US dollar in settlements with its foreign trade partners, significantly expanding the number of deals in Russian rubles and euro, according to international audit firm FinExpertiza.
The share of settlements in Russia’s foreign trade using the greenback declined by 12.6 percent between 2013, before Western sanctions were introduced against the country, through 2018, research by the Moscow-based consultancy shows. At the same time, Moscow boosted the range of foreign trade deals settled in euro by 26.6 percent. The share of settlement in rubles rose by 14 percent.
Economic penalties against Russia were introduced by the US administration and backed by the European Union in 2014. The sanctions came in response to Russia’s alleged involvement in the crisis in eastern Ukraine and following the Crimean referendum to secede from Ukraine and rejoin Russia. Since then, the measures have been expanded for various reasons.
Russian authorities have taken a wide range of retaliatory steps, including the gradual reduction of the country’s reliance on the US dollar in the sphere of international settlements.
Over the five-year period, the share of the US dollar in Russia’s trade settlements declined to 56.1 percent, accounting for $388 billion. The share of euro-dominated trade deals increased to 21.9 percent or the equivalent of $151 billion. Trade settlements in ruble grew to 20 percent, or $136 billion.
“Tendency towards doing away with the US dollar on foreign trade is obvious. This is the way to a more stable economy and protection of it against sanctions,” said Elena Trubnikova, chairwoman of FinExpertiza’s board, as quoted by RIA-Novosti.
“This is mostly true for exports, as selling the goods for the national currency of the exporter is a natural order of things,” she said.
The executive noted that the latest steps towards de-dollarization have boosted the share of settlements in ruble and yuan in mutual trade between Russia and China. The share of ruble settlements in Russia’s exports to China grew more than fivefold, while yuan-dominated settlements in China’s exports increased by nearly nine times.
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