By Blessing Enechojo Abu
Russia, China, Iran, and Saudi Arabia are actively working on seeking alternatives to the US dollar in a bid to reduce its dominance in the international financial system.
On March 21, 2023, Russia and China signed 14 economic agreements covering everything from scientific cooperation to joint production of television programs, as they look to counterbalance the US dollar’s worldwide dominance.
Russian and Chinese central banks are deliberately holding fewer dollar reserves while choosing Yuan as currency in most of their trades.
Russia’s shift From Dollar is as a result of international sanctions imposed on them for invading Ukraine.
China has been the economic lifeline for Russia during this sanction. Choosing the Chinese Yuan over the US dollar, the Russian President said “We are in favor of using the Chinese yuan for settlements between Russia and the countries of Asia, Africa, and Latin America,”
“I am confident that these forms of settlement in yuan will develop between Russian partners and their counterparts in third countries.”
China’s growing quest to enshrine the yuan as a worldwide currency also led to Chinese President, Xi Jinping, negotiating a peace treaty between Saudi Arabia and Iran last week after unsuccessful attempts to re-establish diplomatic relations in nearly two years.
While Saudi Arabia-US relations have been strained over the years due to differences in morality, curbing arms supplies, etc, China has forged good diplomatic relations with countries across the Middle East driven by strengthening economic ties, without the Western lectures on human rights.
Saudi Arabia’s King-in-waiting Crown Prince Mohammed bin Salman, has found a kindred spirit in China’s leader Xi Jinping, and the Country is now considering selling oil to China for Yuan instead of Dollars.
Photo: The Kremlin (Reuters)