The world has taken “significant” steps towards ending dependence on the US dollar, the head of VEB.RF has said
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The Chinese yuan is gradually depriving the US dollar of its competitive advantage and has acquired the status of a global reserve currency, Igor Shuvalov, head of Russian state development corporation VEB.RF, said on the sidelines of the St. Petersburg International Economic Forum (SPIEF 2023) on Thursday.
According to Shuvalov, countries around the world have already made “significant” progress toward abandoning their dependence on the greenback, and “this process will continue.”
“Even those who are on good terms with the US, seeing the current economic and financial confrontation, will support the development of alternate settlement systems that do not rely on SWIFT and the dollar – for their own safety… It’s not a matter of trust or distrust, it’s a fact of life that must be overcome by creating new payment systems,” Shuvalov stated.
He added that VEB.RF does not use the dollar in international settlements with foreign partners, and instead makes payments in yuan and other “friendly” currencies.
“The yuan is now a global reserve currency, there is no hiding it,” he stressed.
According to data from the International Monetary Fund (IMF), the dollar’s share in global foreign currency reserves dropped to a nearly three-decade low of 58% in the fourth quarter of 2022. Many countries have begun to shift away from the dollar in cross-border transactions amid concerns over soaring US debt and widely implemented sanctions using the currency as leverage. Russia, which faced unprecedented sanctions from Washington last year, has switched nearly all of its energy trade to national currencies, including the ruble and yuan.
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Meanwhile, the yuan’s presence on the global market has been growing. Its share of global over-the-counter forex transactions has increased from almost zero 15 years ago to 7% in 2023, according to the Bank for International Settlements (BIS). In March this year, the yuan surpassed the dollar in China’s cross-border transactions, as the majority of the country’s partners have also been taking steps to limit their dependence on the dollar.
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