Bank of Russia Analysts Note Ditching US Dollar Is ‘Hardly Possible’ Without Structural Changes to Foreign Trade

0 5

bank of russia u.s. dollar

knife

A report from the research department of the Bank of Russia shows that, due to the structure of foreign trade contracts, it will be difficult to ditch the usage of the U.S. dollar to settle payments. The analysts found that contracts are often denominated in U.S. dollars and that most transactions are still concluded with providers from unfriendly countries.

Bank of Russia Analysts Find Ditching U.S. Dollar Might Prove Difficult

Analysts from the Bank of Russia have found that ditching the U.S. dollar for foreign trade settlements will not be simple due the structure of trading contracts. The analysis comes from a report titled: “Review of the Russian Financial Sector and Financial Instruments,” issued by the Bank of Russia on April 11, which examines the risks that the country still might face due to U.S. sanctions.

The report states that “it will hardly be possible to abandon the use of U.S. dollars or euro without import contracts being shifted to payments in rubles or friendly countries’ currencies.” The reason behind this is said to lie in how import contract prices are formulated in U.S. dollars and euros and how most providers still prefer to receive payments in currencies of friendly countries.

This means that Russia will still be subject to the availability of the currencies of non-friendly countries (in relation to Russia), like the U.S. dollar, through forex markets. This determines that the country will have to also rely on conversions of rubles to yuan to purchase dollars through Chinese banks, which can also be affected by secondary sanctions.

U.S. Dollar and Euro Still Preferable

Due to how international trading works, the report recognizes that even exporters from countries friendly to Russia prefer to be paid in U.S. dollars and euros, increasing the demand for these currencies. However, the report believes that the push for import substitution actions could lead to lower demand for unfriendly foreign currency in the mid-to long-term.

This vision is consistent with the prediction of several economists on the currency issue. Nouriel Roubini, an economist known as “Dr. Doom,” has predicted that the global economy will shift into a “bipolar” reserve currency system, featuring the Chinese yuan as an alternative to the U.S. dollar.

Russia has been seeking alternatives to its current trading woes, partnering with China to rely on the Chinese yuan to settle part of its payments in Chinese currency. In the same way, President Vladimir Putin has declared he will support the usage of the Chinese yuan to settle transactions with countries in Latin America, Africa, and Asia.

What do you think about the usage of the U.S. dollar in international markets? Tell us in the comments section below.

Leave A Reply

Your email address will not be published.

bitcoin
Bitcoin (BTC) $ 67,056.97
ethereum
Ethereum (ETH) $ 3,509.88
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 594.60
solana
Solana (SOL) $ 173.03
staked-ether
Lido Staked Ether (STETH) $ 3,509.39
usd-coin
USDC (USDC) $ 1.00
xrp
XRP (XRP) $ 0.592127
dogecoin
Dogecoin (DOGE) $ 0.13307
the-open-network
Toncoin (TON) $ 7.27
cardano
Cardano (ADA) $ 0.435786
tron
TRON (TRX) $ 0.134829
avalanche-2
Avalanche (AVAX) $ 28.99
shiba-inu
Shiba Inu (SHIB) $ 0.000018
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 67,069.97
polkadot
Polkadot (DOT) $ 6.34
chainlink
Chainlink (LINK) $ 14.21
bitcoin-cash
Bitcoin Cash (BCH) $ 394.35
near
NEAR Protocol (NEAR) $ 6.27
uniswap
Uniswap (UNI) $ 7.98
litecoin
Litecoin (LTC) $ 73.17
dai
Dai (DAI) $ 1.00
leo-token
LEO Token (LEO) $ 5.68
wrapped-eeth
Wrapped eETH (WEETH) $ 3,662.92
pepe
Pepe (PEPE) $ 0.000012
matic-network
Polygon (MATIC) $ 0.540577
internet-computer
Internet Computer (ICP) $ 10.27
kaspa
Kaspa (KAS) $ 0.181322
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.45
ethereum-classic
Ethereum Classic (ETC) $ 23.90
aptos
Aptos (APT) $ 7.36
ethena-usde
Ethena USDe (USDE) $ 1.00
stellar
Stellar (XLM) $ 0.105117
monero
Monero (XMR) $ 163.31
mantle
Mantle (MNT) $ 0.893824
blockstack
Stacks (STX) $ 1.91
render-token
Render (RNDR) $ 7.03
filecoin
Filecoin (FIL) $ 4.69
hedera-hashgraph
Hedera (HBAR) $ 0.074923
injective-protocol
Injective (INJ) $ 27.51
maker
Maker (MKR) $ 2,820.88
dogwifcoin
dogwifhat (WIF) $ 2.62
arbitrum
Arbitrum (ARB) $ 0.77896
okb
OKB (OKB) $ 42.87
cosmos
Cosmos Hub (ATOM) $ 6.51
crypto-com-chain
Cronos (CRO) $ 0.09379
immutable-x
Immutable (IMX) $ 1.63
vechain
VeChain (VET) $ 0.030656
bittensor
Bittensor (TAO) $ 336.66
arweave
Arweave (AR) $ 33.74
optimism
Optimism (OP) $ 1.91
bonk
Bonk (BONK) $ 0.000031
sui
Sui (SUI) $ 0.846371
the-graph
The Graph (GRT) $ 0.216394
first-digital-usd
First Digital USD (FDUSD) $ 0.998548
renzo-restaked-eth
Renzo Restaked ETH (EZETH) $ 3,559.48
rocket-pool-eth
Rocket Pool ETH (RETH) $ 3,931.19
floki
FLOKI (FLOKI) $ 0.000197
mantle-staked-ether
Mantle Staked Ether (METH) $ 3,640.47
lido-dao
Lido DAO (LDO) $ 1.92
notcoin
Notcoin (NOT) $ 0.016149
thorchain
THORChain (RUNE) $ 4.84
theta-token
Theta Network (THETA) $ 1.62
bitget-token
Bitget Token (BGB) $ 1.14
ondo-finance
Ondo (ONDO) $ 1.08
aave
Aave (AAVE) $ 99.29
based-brett
Brett (BRETT) $ 0.148415
whitebit
WhiteBIT Coin (WBT) $ 10.11
fantom
Fantom (FTM) $ 0.518872
jasmycoin
JasmyCoin (JASMY) $ 0.029854
jupiter-exchange-solana
Jupiter (JUP) $ 1.03
pyth-network
Pyth Network (PYTH) $ 0.364279
algorand
Algorand (ALGO) $ 0.158044
celestia
Celestia (TIA) $ 6.50
coredaoorg
Core (CORE) $ 1.42
sei-network
Sei (SEI) $ 0.396108
ether-fi-staked-eth
ether.fi Staked ETH (EETH) $ 3,509.80
mantra-dao
MANTRA (OM) $ 1.32
quant-network
Quant (QNT) $ 75.12
gatechain-token
Gate (GT) $ 7.85
flow
Flow (FLOW) $ 0.648918
elrond-erd-2
MultiversX (EGLD) $ 36.01
beam-2
Beam (BEAM) $ 0.018993
gala
GALA (GALA) $ 0.025766
axie-infinity
Axie Infinity (AXS) $ 6.42
popcat
Popcat (POPCAT) $ 0.964669
kucoin-shares
KuCoin (KCS) $ 9.88
bitcoin-sv
Bitcoin SV (BSV) $ 47.47
msol
Marinade Staked SOL (MSOL) $ 208.58
eos
EOS (EOS) $ 0.610378
tokenize-xchange
Tokenize Xchange (TKX) $ 11.16
kelp-dao-restaked-eth
Kelp DAO Restaked ETH (RSETH) $ 3,572.57
flare-networks
Flare (FLR) $ 0.020108
bittorrent
BitTorrent (BTT) $ 0.00000090164158
dydx-chain
dYdX (DYDX) $ 1.44
ethereum-name-service
Ethereum Name Service (ENS) $ 26.41
akash-network
Akash Network (AKT) $ 3.57
ordinals
ORDI (ORDI) $ 41.08
neo
NEO (NEO) $ 12.02
ethena
Ethena (ENA) $ 0.48604