Overview

Click to expand overview
In a report released on Friday, the Central Bank of Russia said it sees limited options other than the Chinese yuan for its reservesbecause other currencies from Western sanctions have forced Russia to rely on the Chinese yuan for reserves and trade. China is concerned about sanctions, too. But unlike Russia, it lacks Russia’s Dependency on the Chinese yuan for reserves is risky as the currency is down 2.1% year-to-date in 2025 against the US dollar. In addition, even Russia’s China and Russia have almost completely phased out the dollar from their bilateral trade. More than 90% of trade between the two nations is done with either the yuan or Russia and its ally China have “almost completely” ditched the US dollar to settle bilateral trade. Instead, they are using their own currencies, the yuan and rouble.

De-Dollarization Russia: Is the Chinese Yuan Its Only Option?

Facing crippling Western sanctions, Russia is rapidly de-dollarizing its economy. But does Russia truly have a choice beyond increasing reliance on the Chinese yuan? A recent report sheds light on the situation. In a report released on Friday, the Central Bank of Russia said it sees limited options other than the Chinese yuan for its reserves because other currencies are now restricted. This highlights how Western sanctions have forced Russia to rely on the Chinese yuan for reserves and trade.

Russia\'s Reliance on the Yuan: A Risky Bet?

While China offers a lifeline, Russia\'s Dependency on the Chinese yuan for reserves is risky. The currency is subject to its own fluctuations, and the yuan is down 2.1% year-to-date in 2025 against the US dollar. This raises concerns about the long-term stability of using the yuan as a primary reserve currency.

China\'s Perspective: A Balancing Act

China, too, faces its own set of considerations. China is concerned about sanctions, too. But unlike Russia, it lacks the same level of immediate pressure. This means China must balance its relationship with Russia against its broader global economic interests. Even Russia’s significant shift towards the yuan is not without complexities for China.

The Rise of Yuan-Rouble Trade

The de-dollarization trend is evident in bilateral trade. China and Russia have almost completely phased out the dollar from their bilateral trade. More than 90% of trade between the two nations is done with either the yuan or the Russian ruble. Russia and its ally China have “almost completely” ditched the US dollar to settle bilateral trade. Instead, they are using their own currencies, the yuan and rouble. This signals a major shift away from the dollar in trade between the two countries.

The Future of De-Dollarization in Russia

The path towards de-dollarization is fraught with challenges. While the Chinese yuan offers a viable alternative in the short term, Russia must carefully consider the risks and explore other potential solutions to secure its economic future. Whether this complete reliance on the yuan is sustainable remains to be seen.

Top Sources

Related Articles