Recently, Russian Foreign Minister Sergei Lavrov announced at a meeting in Moscow that Russian-Chinese trade and economic cooperation has been almost completely de-dollarized, and more than 90% of settlements are carried out in national currencies. There are many signs that Russia no longer trusts the dollar and calls it a "completely unreliable tool".
The local currency transaction between Russia and China has aroused the attention of global traders, especially the possible impact on foreign trade enterprises. Today, Tengdao will lead you to discuss some of the impacts that the de-dollarization of Russia and China may have on foreign trade enterprises, and how foreign trade enterprises should respond.
1. Exchange rate risk and cost pressures
With the de-dollarization of Russian-Chinese trade, foreign trade enterprises may face more exchange rate risks. If the settlement currency fluctuates, companies may need to take additional risk management measures to reduce the impact of exchange rate fluctuations on profits. In addition, settlements with different national currencies can lead to additional cost pressures for businesses, as currency conversions may be required and additional processing fees may be paid.
2. Trade finance and liquidity
As trade settlements no longer rely on the US dollar, foreign trade companies may need to adjust their trade finance strategies. Settlement in the local currency may affect the way and cost of external financing for the business. In addition, if a company's liquidity is affected, it may be necessary to manage cash flow more carefully and look for more flexible cash management options.
3. Supply Chain and Partnerships
The de-dollarization of Russian-Chinese trade may have an impact on the supply chains and partnerships of foreign trade enterprises. If your supply chain involves Russia or China, you may need to re-evaluate how you work with your suppliers and customers. Businesses may need to negotiate new billing methods with partners to adapt to the de-dollarization trend and ensure the smooth running of business.
4. Political and geopolitical risks
There may be political and geopolitical risks behind the de-dollarization of Russian-Chinese trade. While de-dollarization can reduce dependence on the dollar, it can also trigger political tensions with the United States and its allies. Foreign trade companies may need to consider and carefully assess these potential political and geopolitical risks, as well as the potential impact on their business.
The de-dollarization of Russian-Chinese trade will have a wide-ranging impact on foreign trade enterprises, involving exchange rate risks, trade finance, supply chain management, and political and geopolitical risks. Enterprises and foreign trade enterprises should pay close attention to market dynamics, avoid risks in a timely manner, and take corresponding measures to adapt to this change and ensure the steady development of foreign trade business. Foreign traders don't need to worry too much about policy changes, after all, where there are risks, there are also business opportunities. For more foreign trade dry goods and information, please pay attention to Tengdao's official public account: [Tengdao Tendata]
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