Ruble Surges in Asian Trade as Russia Slashes US Dollar Use

(MENAFN) Russia is rapidly intensifying its push to reduce reliance on the US dollar, with the ruble's share in foreign trade with Asian nations hitting a record 50.7% in May. This marks the first time it has crossed the halfway mark, signaling a critical shift in Russia’s de-dollarization campaign. Meanwhile, demand for both the euro and the US dollar continues to decline.

According to the Russian Central Bank, the ruble’s usage in trade with Asia rose by 2 percentage points compared to the previous month. However, its share in exports to Europe slid by 2.3 percentage points, landing at 59.8%. Trade with Africa also saw a sharp drop in ruble usage, falling 14.3 percentage points to 84.6%.

In contrast, Russia’s trade with the Americas showed an uptick, with the ruble’s share climbing by 2.3 percentage points to 51.9%. Trade with Oceania also increased, with ruble transactions rising 3.1 percentage points to 94.2%.

Economists note that this shift brings Russia financial advantages, including reduced costs from currency conversion and commissions—expenses that were common when the ruble played a minor role in international trade. However, challenges remain. The ruble’s limited global convertibility and volatility present hurdles, especially for importers who seek more stable currencies like the Chinese yuan to hedge against exchange rate risks.

Russia’s pivot away from the dollar gained significant traction following the onset of the war in Ukraine in February 2022, as Western sanctions prompted Moscow to scale back dollar-denominated transactions.

While speculation has swirled about a unified BRICS currency, bloc officials have dismissed the idea. The group—comprising Brazil, Russia, India, China, and South Africa—is instead focused on increasing the use of national currencies in bilateral trade and lessening dependence on the US dollar.

U.S. President Donald Trump stated on July 8 that the BRICS alliance was “set up to degenerate” the U.S. dollar and “take the dollar off as a standard.” He added, “What they’re trying to do is destroy the dollar so that another country can take over and be the standard, and we’re not going to lose the standard—if you have a smart president, you will never lose the standard.”

Analysts argue that sanctions and Trump-era protectionist measures—particularly tariffs—have eroded international confidence in the dollar. This has spurred a global pivot toward alternative assets, including gold, the euro, and the Chinese yuan.

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