Most of the trade deals in Russia are planned to be transferred to the Chinese yuan. Why is the aggressor country interested in Chinese currency and will it be able to carry out its plan?
Russia intends to intensify foreign payments in Chinese currency. This was expressed by Russian President Vladimir Putin.
“We are in favor of the use of Chinese yuan in settlements between Russia and Asian, African and Latin American countries. I am confident that such settlements in yuan will be developed between Russian partners and their counterparts in third countries,” Putin said. .
Mikhail Podolyak, adviser to the head of the Presidential Office of Ukraine, was skeptical of the Russian Federation’s intentions to expand settlements in yuan.
Even the transition to the “yuan trade” will not allow Russia to buy itself a “victory”, to implement the “peace plan” on its own terms, and to eliminate significant legal, financial and physical problems…” Podolyak wrote.
as said Focus financial market analyst Ivan Uglyanitsa, now in Russia, settlements under foreign economic contracts are made through loans in dollars, euros and local currencies, that is, by credit deliveries.
“Specifically, we are talking about settlements with Turkey, United Arab Emirates, China, India, etc., at least partially in local currencies. The dollar is not completely blocked for settlements either – there are a significant number of trade deals. Banks that have not yet been sanctioned, where dollar correspondent accounts are working,” he says. expert.
According to him, the yuan helps bypass or partially mitigate the impact of Western sanctions, as do other local currencies (Turkish lira, UAE dirham, Indian rupee) that Russia is trying to manipulate trade deals and financial transactions with.
However, these instruments are very dubious in terms of replacing reserve currencies (dollar, euro). These currencies are not freely convertible, their exchange rates and circulation are under great control and restrictions by the respective countries.“, – explained Ivan Uglyanitsa.
Experts doubt that the aggressor country can actually transfer most of its settlements in foreign contracts to the yuan.
Former NBU Council member Vitaliy Shapran says the nominal scale of the Chinese economy is not as large as the US and EU. Also, yuan-denominated interbank clearing systems are not ready for the currency to be used as the main reserve.
“It turned out that it is not so easy to get back the significant amount of yuan that the Central Bank of the Russian Federation has put in the PRC, and for this a certain flow of goods is needed. The Chinese market is not ready for the free entry and exit of hundreds of billions of yuan capital“, – Vitaly Shapran sure.
How Focus Western media reported that the logic of the ongoing economic debate between the Kremlin and Beijing at the moment is reduced to the fact that Russia has turned into a raw material extension of China.
Earlier, US Secretary of State Anthony Blinkan said that China is closely watching Washington’s response to the war in Ukraine. According to him, China has so far refrained from supplying arms to Russia.
Source: Focus
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