Greenback’s share of neighbors’ trade falls below 50% for first time
MOSCOW — Russia and China are partnering to reduce their dependence on the dollar — a development some experts say could lead to a “financial alliance” between them.
In the first quarter of 2020, the dollar’s share of trade between Russia and China fell below 50% for the first time on record, according to recent data from Russia’s Central Bank and Federal Customs Service.
The greenback was used for only 46% of settlements between the two countries. At the same time, the euro made up an all-time high of 30%, while their national currencies accounted for 24%, also a new high.
Russia and China have drastically cut their use of the dollar in bilateral trade over the past several years. As late as 2015, approximately 90% of bilateral transactions were conducted in dollars. Following the outbreak of the U.S.-China trade war and a concerted push by both Moscow and Beijing to move away from the dollar, however, the figure had dropped to 51% by 2019.
Alexey Maslov, director of the Institute of Far Eastern Studies at the Russian Academy of Sciences, told the Nikkei Asian Review that the Russia-China “dedollarization” was approaching a “breakthrough moment” that could elevate their relationship to a de facto alliance.