Russia agrees to yuan as main currency for SCO Development Bank
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Russia has agreed to use the Chinese yuan as the primary currency for the planned Shanghai Cooperation Organisation (SCO) Development Bank, according to the Wall Street Journal. Moscow had resisted the move for over a decade, fearing greater Chinese economic influence, but prolonged financial isolation forced a policy shift.
The Currency Agreement
The Wall Street Journal reported on July 14 that Russia has agreed to designate the yuan as the main currency for the SCO Development Bank, a long-planned institution aimed at financing infrastructure projects across member states. Moscow had blocked the proposal since 2013, preferring a basket of currencies or the ruble. The shift reflects Russia's growing dependence on China amid Western sanctions.
Financial Isolation Impact
Russia's financial isolation since the 2022 invasion of Ukraine has severely limited its access to dollar and euro markets. The country has increasingly turned to yuan-denominated trade and reserves, with the yuan now accounting for over 40% of Russia's foreign exchange reserves, according to central bank data. The SCO Development Bank, with initial capital of $10 billion, is expected to challenge Western-led institutions like the IMF and World Bank.
What's Next
The SCO Development Bank's charter is expected to be finalized at the next SCO summit in September 2026. It remains unclear whether other member states, particularly India, will fully endorse the yuan-centric structure or seek alternative arrangements.
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Russia agrees to yuan as main currency for SCO Development Bank
