De-dollarization being forced on Russia – Putin

The country would have continued to use the greenback but sanctions prevent it, the Russian leader has said

Russia’s growing use of the Chinese yuan and other currencies in transactions with foreign partners should not be seen as an attack on the US dollar, according to President Vladimir Putin. In a weekend interview with the Russia 24 TV channel, Putin said the decision had been forced on his country by Western sanctions.

“We would use the dollar, but they won’t allow us to do that, so how do we make payments? In a currency that is acceptable to our trading partners. The yuan is one such currency, especially since it is also used by the International Monetary Fund,” the Russian leader stated.

The numerous sanctions imposed on Moscow in response to its military operation in Ukraine include the blacklisting of a number of Russian banks and their removal from the SWIFT interbank messaging system, as well as bans on transactions with Russian financial entities and the freezing of foreign exchange reserves. The restrictions have stripped Russia of the ability to conduct a wide range of international transactions in dollars and euros, which has caused Moscow to lose trust in these currencies.

While Russia has been boosting the use of alternative currencies in transactions since last year, earlier this month Putin suggested that the Chinese yuan should be used more widely, not only in trade with China, but also in Russia’s transactions with countries in Africa and Latin America.

Putin reiterated that Russia will continue to expand the use of currencies it considers reliable.

“Our partners are happy to agree to settle accounts in yuan with us. Oil-producing countries in the Middle East have said they also want to settle accounts in yuan. We will gradually expand its use, and expand the scope of currencies which we deem reliable. Yes, we understand there are certain advantages to the dollar today, there are certain limitations in the currencies that we use, not only the yuan, but other currencies as well. But every country is interested in strengthening its national currency, and all countries will strive to do so,” he said.

READ MORE: US warns Russia and China over dollar alternative

The Russian leader claimed that the US is “cutting off the branch on which it is sitting” by limiting the use of the dollar depending on the political situation.

“There is the very fact that they froze our foreign exchange reserves. All the world’s countries, I assure you – at least those that have reserves – all came to question how reliable America is as a partner. And everyone has come to the conclusion [that it is] unreliable,” Putin added.

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