In a notable instance of de-dollarization among the BRICS nations, Bangladesh will pay for a nuclear plant loan to Russia using the Chinese Yuan. The country is slated to pay approximately $318 million worth of Yuan for this loan payment.
Due to Western sanctions on Russia, Bangladesh could not pay in US dollars. This development aligns with earlier statements from US Treasury Secretary Janet Yellen, who noted that sanctions might negatively impact the US dollar.
A step towards de-dollarization in the Bangladesh-Russia deal
Recently, there has been a marked increase in the BRICS nations’ efforts to reduce their dependence on the US dollar. One striking example is Bangladesh’s payment of a nuclear plant loan to Russia in Chinese yuan.
As reported by Business Insider, this transaction is among the most prominent cases of de-dollarization. Bangladesh agreed to pay Russia around $318 million in Chinese yuan for the nuclear plant loan payment, as sanctions on Moscow made conducting the transaction in US dollars impossible.
The sanctions were imposed in response to Russia’s actions in Ukraine, further highlighting the diminishing dominance of the US dollar in international transactions.
Initially, Russia hesitated to accept payment in Yuan due to concerns about potential losses while insisting on payment in rubles. However, the loan payment has now been officially made in Chinese currency.
This payment partially reimburses a $12 billion loan from Moscow to the South Asian nation. The funds will be used to finance a nuclear power plant near Dhaka, the capital city of Bangladesh.
