BRICS member Russia used the US dollar to settle over 80% of its trade payments up until 2022. The Euro was also the leading currency in Russia to settle cross-border transactions before the US pressed sanctions. However, things took a drastic U-turn after the White House put sanctions on Russia for invading its neighboring country Ukraine. While the Biden administration sought to paralyze Russia’s economy, the opposite of the idea is now beginning to bear fruit.
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BRICS: US Dollar Payment Declines By 67% in Russia
Russia’s economy survived the sanctions as BRICS countries began buying oil from the country and laundered it to Europe. The Gulf Cooperation Council (GCC), ASEAN alliance, and BRICS supported Russia by accepting the Ruble as payment for transactions. In addition, Russia reciprocated the gesture by accepting the Chinese Yuan as payment for international trade.
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Russia used the US dollar for nearly 80% of all transactions globally before the sanctions but now declined by 67%. Currently, BRICS member Russia pays the US dollar for only 13% of all international trade. That’s a sharp drop in two years making the US dollar irrelevant in the country.
Additionally, the Chinese Yuan soared as a payment method in Russia in the last two years. The Chinese Yuan was only used for 3% of all the transactions in Russia but has now skyrocketed to 34%. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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Even Russia’s President Vladimir Putin acknowledged the change in payments in a recent interview with Tucker Carlson. “Until 2022, nearly 80% of foreign transactions in Russia were settled in US dollars or euros. Currently, it is now down to 13%. It wasn’t us that banned the use of the dollar. Our transactions in the Chinese Yuan were 3% before 2022 but are now 34% today. Payments in Russian Rubles have also shot up,” he summed it up.
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The development nurtured Russia’s economy with little to no hindrance to its growth despite the US sanctions. The White House pressing sanctions brought the BRICS alliance together and the alliance is now attractive to other developing countries. Around 34 countries are now looking to join BRICS as it’s the only bloc that is showing importance to local currencies and not the US dollar.