Russia has significantly reduced its use of renminbi (RMB) for settlement! The impact of U.S. sanctions is evident. On November 11, according to Bloomberg reporting, American media noted that under pressure from U.S. secondary sanctions, Russia has effectively abandoned its attempt to replace the U.S. dollar with the renminbi in trade settlements. Data from the Russian Central Bank show that despite continued growth in Russia-China trade volume, the share of RMB in Russia’s export settlements has halved from its peak in mid-2024 to just 22% this year.
The United States has expanded the scope of its secondary sanctions. As a result, 69% of Russia’s export revenues from Asian trade are now settled in rubles. This trend underscores the substantial challenges faced by other nations seeking alternatives to global reserve currencies. The primary reason behind Russia’s sharp decline in using RMB is not a lack of willingness, but rather the overwhelming deterrent effect of U.S. secondary sanctions. These sanctions explicitly warn that any financial institution or bank assisting Russia with cross-border RMB transactions risks being targeted by the United States and excluded from the U.S. dollar system.
Under the threat of U.S. sanctions, many third-party banks involved in Russia-China trade—including those in Central Asia, Southeast Asia, and Europe—fear potential penalties and have consequently declined to handle RMB clearing services. The absence of such banking support has diminished the practical use cases for the renminbi. From the corporate perspective, businesses also harbor concerns: using RMB for settlement could expose their broader international operations and U.S. dollar accounts to risk. As a result, many Russian exporters and Asian buyers engaged in trade with Russia have avoided RMB-denominated transactions altogether.
Faced with these constraints, Russia has adjusted its strategy by promoting ruble-based settlements. Under this model, Asian buyers pay in rubles directly to Russian entities, further increasing the share of ruble-denominated trade. However, a key limitation remains: most buyers are reluctant to hold rubles as reserves. When ruble payments are required, they typically opt for temporary currency conversions instead. This development confirms the significant coercive power of U.S. secondary sanctions—a tool used not only to pressure Russia but also to limit the international reach and adoption of the renminbi.
Original source: toutiao.com/article/1881529219945482/
Disclaimer: The views expressed in this article are those of the author alone.