Russia to ditch US Dollar to safeguard economy, mulls Chinese Yuan instead

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Russia to ditch US Dollar to safeguard economy, mulls Chinese Yuan instead

On Wednesday, the 13th of November 2019, Deputy Finance Minister of Russia, the sixth-largest economy of the world by purchasing power parity (PPP) and 11th largest by nominal GDP (Gross Domestic Product), said that the upper-middle income nation would soon begin to dump its share of American Dollar from its National Wealth Fund, as the country was exploring an option to invest in other foreign currencies including Yuan of China, the largest reserve of foreign currency across the globe with $3,000 billion worth of foreign currency at its coffer, roughly six-fold of second-largest Swiss franc having nearly $450 billion worth of foreign reserve.

In point of fact, Deputy Finance Minister of Russia, Kolychev’s comment comes over the heels of a media report published earlier this month saying that the Russia was contemplating to diversify its foreign currency reserve by 2020 over the narratives of an over-valued American currency alongside a growing geo-political risk at such a circumstance where more than 60 per cent of world’s entire transactions was executed through the US Dollar.

Aside from that, in his Wednesday’s (November 13th) remark, Kolychev was also quoted saying that the latest measure to curb out US Dollar from its National Reserve had been a critical part of safeguarding the nation’s economy from external risks amid US President Donald Trump’s tariff war on multiple fronts including an escalated EU-US tariff war over autos alongside a protracted Sino-US trade spat entering into its seventeenth month.

Nonetheless, up until now, the US dollar makes up of about 36.5 per cent or $126.5 billion worth of foreign reserve in the Russian National Wealth Fund.