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But effectively all of Russia’s trade with China is settled using the renminbi, and that trade has doubled in the past couple of years to over $20 billion per month. It is therefore likely that nearly half of the rise in the international use of the renminbi is simply thanks to Russia.
And even China, a country that has many reasons to worry about dollar weaponization, has not wholeheartedly abandoned it. In 2018, China’s total holdings of dollar-denominated securities amounted to some 50 per cent of its foreign exchange reserves. While this has now to just below 40 per cent, that is still $1.4 trillion of US assets in total – not exactly small change.
While dollar dominance is uncomfortable for many countries, US military power, the structure of its alliances and the slow pace at which the distribution of currency power changes will preserve its status as the top currency for the foreseeable future.
