Thu Jan 10, 2019, 11:58 AM

Russia Buys Quarter of World Yuan Reserves in Shift From Dollar

Council on Foreign Relations in New York.

The data reveal a dramatic acceleration in a policy Russia has been pursuing for several years of reducing exposure to assets that could be affected by U.S. restrictions. Tough sanctions on major Russian companies in early April hammered the ruble and spurred fears that more restrictions could follow, such as measures to cut Moscow off from global payment systems. Russian holdings of U.S. Treasuries dropped by about $81 billion in May and June, according to U.S. data.

Russia isn’t alone in its bid to reduce reliance on the world’s reserve currency amid increasing attempts by Washington to use economic leverage for geopolitical ends. In a deepening trade war with America, China sold a large portion of its U.S. Treasury holdings last year and officials in Europe put forward proposals to increase the use of the euro in regional transactions.

‘Ditching the Dollar’

“We aren’t ditching the dollar, the dollar is ditching us,” Russian President Vladimir Putin said in November. “The instability of dollar payments is creating a desire for many global economies to find alternative reserve currencies and create settlement systems independent of the dollar. We’re not the only ones doing it, believe me.”

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