Russian Dedollarisation and the Emergence of Yuanisation: Analyzing Trends and Implications
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Russian dedollarisation – the second wave means yuanisation
Russia has been one of the leading forces of global de-dollarisation since 2014, when the first round of geopolitical tensions led to higher political risks of USD usage. In 2013-21, the period for which most of the official data is available (Figure 33), Russia managed to significantly reduce its USD usage in exports, imports, foreign liabilities and official international assets. However, the role of USD in private international assets, domestic deposits, and on the FX market did not decline. Also, the de-dollarisation in Russia reflected mostly the replacement of USD with EUR and other DM currencies rather than higher usage of the ruble or other EM currencies.
This was because the sanctions that Russia faced following the annexation of Crimea and the downing of flight MH17 over Ukraine were limited to foreign debt of some state-owned entities, the usage of SDN (ban on transactions) was very limited, which didn’t lead to the loss of attractiveness of USD and EUR as savings currency for the private sector. Contrary to global de-dollarisation which is focused mainly on international reserves, Russian dedollarisation was driven primarily by trade.
