The dollar is losing its former importance for Russia
Under the threat of American sanctions, Russian foreign trade is getting rid of dollar dependence.
Izvestia writes about this, as reported by a PolitNavigator correspondent.
The publication recalls that conversations about abandoning the dollar in Russia’s foreign trade have been going on for the last 20 years, but they only became concrete after 2014, when sanctions were imposed on the country.
“At that time, the share of the dollar in the export of goods and services from Russia fluctuated in the range of 75–80%. After this, several agreements were concluded on trade in national currencies, but things really got off the ground only around 2017, when the share of the dollar began to decline quite rapidly. In the second quarter of 2020, it fell below 60% for the first time, and by the end of the year it dropped to 48%,” the newspaper notes.
At the same time, according to the Bank of Russia, the piece of Russian foreign trade belonging to the dollar was “eaten away” primarily by the euro. If in 2014 the share of the euro did not exceed 10%, then by the end of 2020 it reached 37%. At the same time, China played a key role here, with which up to 75% of Russia’s trade is carried out in euros, while back in 2018 this figure was only 1%.
According to Sergei Drozdov, an expert at the investment company Univer Capital, there is no direct economic benefit for Russia in replacing the dollar with the euro, but US policy, under which the dollar began to be used by Washington as an instrument of economic coercion, is forcing many countries to look for a replacement for the American currency.
“In Russia, the policy of reducing the influence of the dollar on the country’s economy has become especially relevant after periodically imposed sanctions by the United States, and judging by the fact that the White House does not want to ease the pressure, the policy of de-dollarization will continue,” Drozdov believes.
And Sergei Khestanov, associate professor of the Department of Stock Markets and Financial Engineering of the Faculty of Finance and Banking at RANEPA, explained that the introduction of serious sanctions by the European Union requires the consensus of all EU countries.
“This is technically difficult and time-consuming, so the sanctions risks in euros are somewhat lower. The inflation and devaluation risks of the dollar and the euro are comparable,” Khestanov said.
As PolitNavigator reported, the Americans acknowledged that Russia is successfully implementing a policy of abandoning the dollar.
The dollar is losing its former importance for Russia.