The currency wars have now intensified, with the Chinese Yuan leading the financial space aggressively against the US dollar.
The Chinese yuan is now strongly competing against the US dollar. Per new developments rife in the space, the Chinese Yuan is now potentially on the verge of outperforming the US dollar by leading central and offshore transactions in Russia.
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The Rise of the Chinese Yuan
Per a Reuters report, the Chinese Yuan has now become a leading foreign currency in Russia, leaving the US dollar behind in a new currency development.
The new data metrics reveal that Russia has been using Chinese Yuan more than the US dollar, accounting for 42% of its usage. The figure has overtaken the USD metrics, which account for a mere 35%. With such extensive usage, Russia is anticipated to triple its Yuan trading requirements, exceeding its previous figure of $385 billion. (2023)
Russia has been using the Chinese Yuan primarily to conduct foreign trade and offshore transactions and not the US dollar. The nation is currently battling intense pressure mounted by heaps of Western sanctions imposed by the US. The levied sanctions have hampered Russia’s global supremacy status, rendering it incapable of carrying out transactions via traditional and established trade routes.
To evade sanctions and sustain its economy, the nation is desperately looking forward to exploring alternatives to executing its economic-centric daily chores.
Russia’s Enmity Towards the US Dollar Gains Further Momentum
Moscow is now intensifying its calls against the US dollar, floating in the concept of de-dollarization in space. In an interview with Putin, the Russian Prime Minister was noted urging the Middle East oil producers to ditch the US dollar.
He further shared the need to embrace national and regional currencies in efforts to bolster a nation’s collective economic strength.
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“For further expansion of the whole range of trade and economic ties, it is important to more vigorously shift financial settlements on trade transactions to national currencies, including the ruble.”
Moreover, the USD is now weakening against several new currencies. With the Kenyan shilling rising on top of the radar, the US dollar is now battling strong contenders from all sides, with calls to promote regional currencies gathering pace.
The declining purchasing power of the US dollar is also a major concern for the US, as its development is putting a dent in its global reserve status and prestige.