In the wake of the ongoing Ukraine war and subsequent sanctions, Russia's adoption of the Chinese yuan could potentially undermine long-term dollar dominance, according to Beata Javorcik, Chief Economist at the European Bank for Reconstruction and Development (EBRD). This shift is primarily attributed to the diversification of invoicing currencies.
The statement was suggesting that Russia's strategic move towards the Chinese currency is a part of a broader trend of de-dollarization.
This trend has been gaining momentum due to geopolitical tensions and economic sanctions that have isolated Russia from Western financial systems.
The EBRD economist pointed out that this shift towards the yuan may lead to a significant change in global currency dynamics. The diversification away from the dollar in international transactions can potentially erode its dominance in the long run.
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