The dollar and the euro have lost their dominance in settlements following a US-led sanctions policy, a deputy finance minister has told RT
The share of the US dollar and euro in Russia’s settlements slumped from 90% in early 2022 to less than 50% by the end of the year and will keep falling, Russian Deputy Minister of Economic Development Vladimir Ilyichev told RT on Friday.
The US dollar and euro are gradually losing global dominance as a Washington-led sanctions policy has prompted more countries around the world to shift to settlements in national currencies, he said at the St. Petersburg International Economic Forum (SPIEF).
“In early 2022 the share of the dollar and euro in our trade turnover totaled almost 90%. By the end of the year, the share of these currencies dropped to 48%, with more than 50% of settlements being carried out in rubles and yuan. This year the trend will persist, as Western countries continue adopting sanctions packages,” Ilyichev said.
Russia started actively replacing the dollar and euro in its foreign settlements with other currencies last year and dramatically reduced the number of banking accounts and transactions between companies and financial institutions involving Western currencies.
Depending on various scenarios, the Russian Finance Ministry expects the share of the greenback and euro to diminish to 10-15% by year’s end, the deputy minister revealed. He noted that the share of the ruble in settlements between countries in the Eurasian Economic Union (EEU) reached 75% in 2023.
“Outside the EEU and former Soviet countries, China and the Arab states are among those who are shifting away from the dollar more actively. We’ve reached substantial volumes of settlements in rupees with India,” the official stated.
Asian countries – including China – have emerged as key trade partners, with economic cooperation rapidly gaining momentum. Russia and China have accelerated the use of their own currencies in trade, which has benefitted both nations.
According to official figures, bilateral trade between China and Russia rose by over 34% year-on-year in 2022 – to a record high of $190 billion. Now, Moscow and Beijing have set a new trade goal of $300 billion by 2030, according to Ilyichev.
The official also revealed that Russia and Iran were at the final stages of a free trade agreement – one that “embraces all our trade” and is due to be signed as early as this year. The deal is expected to be excellent for Russian companies, as they would be exempted from Iran’s notoriously high export duties.
Similar free trade agreements are now being negotiated with the United Arab Emirates, Egypt, and Indonesia and are projected to come into force in a few years, Ilyichyov said.
For more stories on economy & finance visit RT’s business section