(MENAFN) Renowned Russian businessman Oleg Deripaska has highlighted the increasing prominence of the Chinese yuan in global payments, asserting that the currency's share has nearly doubled due to the sanctions policies pursued by the United States and the European Union. Citing figures from a Financial Times report, Deripaska pointed out that global settlements conducted in Chinese yuan surged from 1.9 percent in January 2023 to 3.6 percent in October, showcasing a remarkable shift in international financial dynamics.
In a sarcastic remark on his Telegram channel, the aluminum magnate emphasized the "extreme success" of European and American sanctions policies, noting that the number of worldwide transactions in Chinese yuan had doubled over the past year. Deripaska predicted that cross-border trade payments in Chinese yuan would surpass those made in euros within just four years, suggesting a significant reorientation in global trade dynamics.
The Financial Times report underscores the growing imperative for China to reduce its reliance on the United States dollar and other G7 currencies, driven by escalating sanctions against Russia and heightened tensions with the United States over Taiwan. The diversification of global settlements aligns with China's strategic efforts to establish the yuan as a formidable international currency, challenging the dominance of traditional Western currencies.
In a noteworthy development, the yuan surpassed the euro in September to become the second-most used currency in global transactions, marking a milestone in the six years of data tracking by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). The report indicates a broader trend where countries, particularly in response to sanctions imposed in 2022 and subsequent extensions, are seeking to minimize reliance on the Western financial system. Instead, they are opting to conduct trade settlements in national currencies, including the yuan, rupees, and dirhams.
As the global financial landscape undergoes a transformation, fueled by geopolitical dynamics and economic considerations, the rise of the Chinese yuan in international transactions signals a significant shift that could reshape the dynamics of global finance in the years to come.
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