Well, well, well, it seems like Russia is facing yet another obstacle in its tumultuous relationship with China. Reports now claim that Russian banks have run out of yuan as Chinese firms are pulling away from the nation. This news comes as a blow to Putin’s aspirations of forming a strong alliance with China, which seems to be playing the long game and reaping the benefits at Russia’s expense.
The idea of the two countries being allies seems to be crumbling before our very eyes. China’s strategic maneuvering to distance itself from Russia reflects a larger truth: Russia may have overplayed its hand in its dealings with China.… Continue reading
The recent news of Russia being hit with new US sanctions and subsequently halting dollar and euro trade on its main bourse has sparked a wave of reactions and speculations. Many Russians, mindful of the historical crashes of the rouble, hold their savings in foreign currencies, but the central bank assures that these deposits are secure. However, trusting the Russian central bank can be a precarious decision. If I had money in Russian banks, I would undoubtedly be anxious to withdraw it before it potentially disappears into thin air. The recent surge in dollar rates at some banks post-sanctions news is not surprising, as it signifies a possible downward spiral for the Russian currency.… Continue reading
China’s yuan replaces the US dollar as the primary currency for Russia’s foreign trade. This development comes as no surprise, considering that Russia has been increasingly sanctioned out of the eurodollar market. The yuan’s share in Russia’s exports has risen dramatically over the past two years, from 0.4% to 34.5%, and its share in imports has also increased significantly, from 4.3% to 36.4%. Settlements in Russian roubles and yuan in bilateral trade have reached as high as 95%.
It is worth noting that both the yuan and the ruble are protected currencies whose official exchange rates do not reflect their true value in the free market.… Continue reading
John Q. Hosedrinker