RUSSIA, CHINA AND INDIA, ARE WORKING TO SIGN AGREEMENTS IN LOCAL CURRENCIES
The US’s use of the dollar weapon to put pressure on its trading partners set the world in motion. The world’s largest trade forces, especially Russia, China and India, are working to sign agreements in local currencies. Governments who want to oppose US sanctions and economic attacks aim to spread the use of the national currency and break the impact of the dollar used by the US as a means of pressure.
These works of Russia and China gave their first fruit. Until just 4 years ago, more than 90 percent of the trade between the two countries was in dollars, while this figure fell below 50 percent for the first time in the first quarter of 2020.
According to Izvestia, one of the leading newspapers in Russia, this rate decreased to 75 percent in 2018, now it has dropped to 46 percent. 54 percent of the trade was in non-dollar currencies (Chinese yuan 17 percent, euro 30 percent and rubles 7 percent). Experts state that the trade war between the USA and China has an impact on the decrease of the dollar’s role in international trade.
As part of these initiatives, in June 2019, Russian Finance Minister Anton Siuanov and People’s Bank of China, Yi Gang, signed an intergovernmental agreement to switch from national dollars to mutual payments. In the statement made by the Russian authorities, it was stated that in the commercial relations between Russia and Chinese enterprises, new mechanisms have already been developed for the payment of national currencies. In January, Russian Foreign Minister Sergey Lavrov announced that Moscow “is gradually pursuing its policy towards dollar-free trade” and wants to deal with national currencies where possible. Lavrov described his attempt to lift the dollar as “an objective response to the unpredictability of US economic policy.” Lavrov said that Washington has explicitly misused the ‘world currency’ status of the dollar.