šØ Russiaās Yuan Borrowing Isnāt Liberation ā Itās a Strategic Trap
Russiaās latest move ā borrowing $2.6B in yuan ā is being sold as a blow to the U.S. dollar.
But look deeper: this isnāt de-dollarization⦠itās dependence under a new master.
In December 2024, Russia issued its first yuan sovereign bond worth CNY 20B.
The headlines called it a breakthrough.
Reality tells a different story:
ā This Bond Isnāt Really āChineseā
Chinese investors cannot legally buy it.
The Moscow Exchange remains under U.S. sanctions.
The buyers are Russian oil and gas giants stuck with piles of yuan they canāt use elsewhere.
These companies didnāt invest ā they were cornered.
š Data Shows Growing Fragility
šØš³š·šŗ RussiaāChina 2024 trade: $245B, with 99% in yuan/rubles
š September 2024: yuan repo rates in Moscow surged to 212%
ā Chinese banks blocked 98% of Russian payments
š„ Russiaās central bank was forced to supply emergency yuan ā
a currency it cannot print
This is not sovereignty ā itās exposure.
Russia didnāt escape the dollar.
It simply replaced one dependency with another.
š Global Macro Context
USD share of world reserves: 56.3%
Yuan share: 2% (flatlining)
Central banks are buying 1,000+ tonnes of gold per year ā
the most since the 1960s.
Countries arenāt switching from dollars to yuan.
Theyāre switching to sanction-proof assets.
ā ļø Hard Consequences for Russia
2025 budget deficit: 5.7T rubles (5Ć original estimate)
National Wealth Fund: ā68% since the Ukraine invasion
Bond yields: 6% for yuan bonds vs 16% for ruble bonds
Russia chooses yuan because itās available, not because itās beneficial.
š„ The Sovereignty Trap
Russia didnāt gain freedom ā it lost alternatives.
By leaning on the yuan, Moscow traded U.S. leverage for Chinese leverage.
The dollar didnāt weaken.
Russiaās options did.
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