Russian Ruble and Chinese Renminbi: Emerging Monetary Powers

Introduction: Two Rising Currency Powers in a Changing Global System

For years, the global financial system has been debating the future of the US dollar1,588+0.52%↗US dollar to Iraqi dinar+0.52%1,58830D as the leading reserve currency, amid the rise of new monetary players — most notably the Russian ruble and the Chinese yuan236.94+0.67%↗Chinese yuan to Iraqi dinar+0.67%236.9430D (renminbi). These two currencies, despite very different historical paths and vastly different economic weight, now find themselves at the center of a global conversation about “monetary multipolarity,” fueled by the growing role of the BRICS bloc and the expansion of trade settled in local currencies instead of the dollar. For DinarView users in Iraq, understanding this landscape is not an academic luxury: as an oil-exporting country that imports heavily from China, Iraq sits in direct contact with shifts in yuan trade settlement and their potential effect on local exchange markets.

From the Soviet Ruble to the Modern Russian Ruble

Today’s Russian ruble did not exist in its current form before the collapse of the Soviet Union in 1991. The Soviet ruble was a tightly controlled central currency that did not trade freely outside the Eastern Bloc, and its official value never reflected real purchasing power because of the centrally planned economy and the absence of a free exchange market. After the collapse, the new Russian Federation inherited a currency with the same name but launched it into a radically different economic environment: runaway inflation through the 1990s, a near-total float of the exchange rate, and repeated financial crises, most notably the 1998 crash, when the ruble collapsed sharply.

The early 2000s brought relative stability, supported by rising oil and gas prices, since the Russian economy depends heavily on energy exports — making the ruble tightly linked to global oil price movements, a dynamic Iraqis will recognize from their own economy’s dependence on oil revenue. Later, Western sanctions imposed on Russia since 2014 (and sharply escalated after 2022) marked a fundamental turning point: major Russian banks were cut off from the global SWIFT payment-messaging system, and large foreign-currency reserves held abroad by Russia’s central bank were frozen. This event alone changed how many countries — including major BRICS members — view the risks of relying entirely on the dollar for their reserves.

As a result of this partial financial isolation, Russia moved to develop alternatives: a domestic payment system parallel to SWIFT, deeper local-currency trade with partners such as China and India, and diversification of reserves away from the dollar and euro toward gold and the yuan. Today’s ruble is a currency with higher-than-usual volatility because of this partial isolation from global financial markets, but it remains the currency of a country that still holds enormous oil and gas reserves and considerable export capacity.

The ruble’s round trip, month by month

The most instructive thing in the ruble’s recent record is not the crash. It is how quickly the crash was reversed, and by what. DinarView’s monthly averages tell the story in three numbers.

In February 2022 the monthly average was about 78 roubles to the dollar. In March it was about 111. By June it was about 58 — stronger than before the war began. What produced that recovery was not confidence: it was capital controls, a policy rate raised to 20 per cent, a requirement that exporters convert their foreign earnings, and the collapse of imports, which left the country with dollars it could not spend. A managed currency can be made to look strong. That is a different thing from being freely convertible, and it is the reason a Baghdad exchange office will price a rouble far more cautiously than a euro.

The Chinese Renminbi: From a Closed Currency to Global Ambition

Unlike the ruble, the Chinese yuan (officially the renminbi, ticker CNY, with the yuan as its base unit) has not undergone a sharp collapse but rather a gradual, carefully planned trajectory managed by Beijing. For decades, the yuan was a fully state-managed currency, pegged at a near-fixed rate to the dollar, with strict controls on capital movement in and out of China. This model served China well during its phase of rapid export-driven industrial growth, giving its exports a clear price advantage.

As China became the world’s second-largest economy, Beijing began, from the early 2010s, taking measured steps toward “renminbi internationalization” — making the currency more usable in international trade and investment without fully abandoning capital controls. Key steps along this path include launching the Cross-Border Interbank Payment System (CIPS) as a partial Chinese alternative to SWIFT for settling cross-border payments in yuan, expanding a network of currency swap agreements with dozens of central banks worldwide, and the yuan’s inclusion in the IMF’s Special Drawing Rights (SDR) currency basket in 2016, in recognition of its growing status.

Despite these steps, the yuan remains far from rivaling the dollar as a dominant global reserve currency; its share of global central bank reserves is still relatively modest compared with the dollar and euro, partly because Beijing continues to impose partial restrictions on capital flows, limiting the confidence of some investors and countries in holding large amounts of yuan as strategic reserves. Still, the overall trend is clear: the yuan is gradually gaining ground, especially in bilateral trade between China and its major trading partners.

BRICS and Talk of an Alternative to the Dollar

No discussion of the ruble and yuan is complete without addressing BRICS, whose original core includes Brazil, Russia, India, China, and South Africa, later expanded to include other countries, some from the Middle East. Successive BRICS summits have floated various ideas about reducing reliance on the dollar in intra-bloc trade, and media reports have repeatedly speculated about a possible “unified BRICS currency.” So far, however, this remains closer to an ambitious long-term idea than an actual project in implementation.

The large economic and political differences among the bloc’s members, their diverging trade interests, and the differences in their monetary systems and central bank independence all make establishing a single currency a structural challenge that, in complexity, exceeds even the eurozone’s experience. What is more realistic in the near and medium term is what is already happening: a gradual expansion of bilateral settlements in local currencies (such as Russian oil exports to India being settled in yuan or rubles), not the emergence of a new global currency rivaling the dollar in the foreseeable future. It is important for DinarView readers to distinguish between “reducing dollar reliance in specific corners of international trade” and “the end of dollar dominance” — these are entirely different matters in terms of timeline and probability.

Set against the talk of a new monetary order, the measured record of both currencies is modest and worth reading plainly.

DinarView yearly averages. The dinar record starts in May 2022; 2026 runs to early September.

The renminbi is the one that is genuinely gaining, and it is gaining slowly. In the Bank for International Settlements’ 2025 survey it was on one side of 8.5 per cent of all foreign exchange trades, up from 7.0 per cent in 2022 and continuing a rise that began in 2013; USD/CNY is now the fifth most traded pair in the world at 8.1 per cent of turnover. But in the IMF’s COFER reserve data for the first quarter of 2026 the renminbi accounted for just 1.99 per cent of allocated official reserves — less than a tenth of the euro’s share and about a twenty-eighth of the dollar’s. A currency can be widely traded and barely held, and the renminbi is the clearest example of exactly that.

For the reader in Iraq the practical consequence is narrow but real. Chinese goods dominate the import trade, and their price in dinars has moved about +4 per cent since 2022 — almost all of it the dinar’s doing rather than the renminbi’s, because Beijing keeps its currency in a managed band. Russian trade with Iraq is small by comparison and settles in dollars in practice, so the rouble’s swings reach an Iraqi household mainly through the price of wheat and fertiliser, not through the exchange board.

Trade Relations Between China, Russia, Iraq, and the Middle East

Iraq represents an important market for Chinese exports, from industrial machinery and equipment to consumer goods and electronics, while China is, in turn, a key partner in Iraq’s reconstruction and infrastructure projects, particularly under the “oil-for-reconstruction” agreements signed between Baghdad and Chinese companies. This large volume of trade makes the question of yuan trade settlement directly relevant to the Iraqi importer: the more the yuan is used to settle import invoices from China (instead of routing mandatorily through the dollar), the more certain foreign-currency demand dynamics inside the Iraqi market shift, even if gradually and indirectly.

The Russian ruble’s presence in Iraqi trade is less direct, but Russia remains an important actor in Iraq’s energy sector through Russian oil companies operating in southern Iraqi fields, in addition to historical arms and technical cooperation ties. As Western sanctions on Moscow have escalated, countries in the region, including Iraq, watch very carefully any financial dealings that might tie them to the Russian banking system, wary of exposure to secondary US sanctions that could affect local banks and the international correspondent banking of the Iraqi dinar.

This delicate balance — benefiting from trade opportunities with China and Russia on one hand, while preserving correspondent banking relationships with the Western financial system and the dollar on the other — is exactly what makes Iraq an interesting case study of “monetary multipolarity” in practice, not merely in political rhetoric.

What Does This Mean for the DinarView User?

For the ordinary Iraqi citizen, trader, or importer, the rise of the ruble and yuan does not mean an immediate, direct change in the Iraqi dinar’s exchange rate, which remains primarily tied to the US dollar through the Central Bank of Iraq’s official rate (1,310 dinars per dollar), alongside the parallel market rate, which is determined by local factors such as the availability of physical dollars, the currency auction, and seasonal demand. But over the medium and long term, any major global shift in the structure of trade and monetary settlements — whether through the yuan’s expanding role or a gradual decline in the dollar’s centrality in certain regional trade channels — could indirectly affect foreign-currency inflows into Iraq and demand patterns for currencies within the local market.

This is why it matters for DinarView users to follow these global monetary developments — not to speculate or make snap investment decisions (this article offers no financial advice and should not be treated as such), but to build a deeper understanding of the context in which local exchange rates move. Knowing that an economy like Russia’s is tied to oil, much like Iraq’s, or that China is carefully working to internationalize its currency without giving up capital controls, gives the reader better analytical tools to understand global economic news and its potential — even if indirect — effect on their own pocket.

Frequently Asked Questions

Can the Chinese yuan replace the dollar as the world’s reserve currency?

Not in the near term. Despite notable progress in internationalizing the yuan, its share of global central bank reserves remains limited compared with the dollar, partly because of continuing Chinese restrictions on capital flows and the currency’s incomplete free convertibility.

What is CIPS, and is it similar to SWIFT?

CIPS (the Cross-Border Interbank Payment System) is a Chinese infrastructure for settling international bank transactions in yuan. It performs a function similar to SWIFT in transmitting payment messages between banks, but it is narrower in scope in terms of participating banks and supported currencies, and it is still expanding.

Will BRICS launch a unified currency soon?

As of this writing, the idea of a “unified BRICS currency” remains more of a theoretical proposal circulating in the media than an actual project under implementation, given the large economic and political differences among the bloc’s members.

Does the rise of the yuan and ruble directly affect the Iraqi dinar’s exchange rate?

The direct, immediate effect is very limited, since the Iraqi dinar remains primarily pegged to the US dollar. However, long-term shifts in the structure of global trade and its monetary settlements could indirectly and gradually affect foreign-currency flows in the Iraqi market.

Sources

• Bank of Russia
• People’s Bank of China
• BIS Triennial Central Bank Survey 2025 — OTC foreign exchange turnover
• IMF — Currency Composition of Official Foreign Exchange Reserves (COFER)
• DinarView — live rate board

Rate figures marked DinarView are computed from this site’s own daily record. Everything else links to the publishing institution.