Coordinator to Federal Tax Ombudsman Meher Kashif Younis Sunday said the payment of oil imported from Russia in “Yuan” is continuation of signs of de-dollarisation surfacing in the global economy.
Speaking at a seminar on “Impact of de-dollarisation on the health of economy” organised under the aegis of Gold Ring Economic Forum, a strategic think tank, he said the sanctions that have frozen Russia out of the global banking system have seen a fresh push since March by the “BRICS” nations, Brazil, Russia, India, China and South Africa, to challenge the dollar’s hegemony.
He said “some signs of de-dollarization are emerging,” adding the trend was likely to persist even as the dollar maintains its “large footprint”.
Efforts by BRICS countries and other major commodity exporters to loosen the dollar’s stranglehold on global commerce have ramped up since the start of the war in Ukraine, which saw the U.S. freezing a large chunk of Russia’s foreign reserves.
Since then Saudi Arabia and China have begun talks to settle Chinese oil sales with the yuan, Brazil and China have announced the phase-in of a yuan clearing arrangement for some trade between the two countries while China and Russia are also now doing a significant portion of their trade in yuan.
Meher Kashif Younis said the rise in Yuan payments has given a boost to Beijing’s endeavours to internationalise its currency, with Chinese banks promoting its use specifically for Russia oil trade. “This is part of the de-dollarisation move which is going on at the international level as the United States has been using economic sanctions as an instrument of war or punishment to the developing countries which is just a natural reaction.
He said Pakistan in its history received its first shipment of Russian oil and payment was made in Chinese RMB, and “Our target is to import one-third of our required oil from Russia to ease burden on people. He further added, “This is the first time that in international trade we are using Chinese currency as a currency of international settlement or trade settlement; this is just the beginning from the Pakistani side.”Meher Kashif Younis said many other countries were also trading using currencies other than the US dollar.
Concluding he said Pakistan is currently grappling with a severe balance-of-payments crisis. Trading in RMB is a strategy to reduce the country’s dependence on the US dollar.
He noted, “This move comes at a time when Islamabad’s currency reserves are rapidly depleting, and the rupee is under pressure from mounting imports,” he added.—NNI
