"After Russia’s full-scale invasion of Ukraine in February 2022 and the imposition of economic sanctions by the EU, US and a number of other advanced economies, Russian imports became increasingly invoiced in yuan," according to the paper led by economists Maxim Chupilkin and Beata Javorcik.
The use of the Chinese yuan for trade with Russia has also increased for third countries that did not impose economic sanctions but hold a currency swap line with the People's Bank of China (PBOC), such as Mongolia and Tajikistan.
Overall, economic sanctions could herald a gradual shift away from the U.S. dollar, the study said.
"The dominance of the U.S. dollar makes international sanctions more effective, as firms engaged in international trade overwhelmingly require payments to be cleared through the U.S. banking system," the authors found.
"At the same time, the use of economic sanctions may over time reduce attractiveness of the U.S. dollar as a vehicle currency and hence its dominance."
Persons:
Maxim Chupilkin, Beata Javorcik, SWIFT, Jorgelina, Karin Strohecker, Philippa Fletcher 私
Organizations:
European Bank for Reconstruction, EU, U.S, People's Bank of China, U.S .
Locations:
Ukraine, China, Russia, Mongolia, Tajikistan, Russian, Rosario