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Russia and Ethiopia Take Steps Away From US Dollar as Dedollarization Grows
Countries are accelerating a shift away from the U.S. dollar in trade, with Russia and Ethiopia deepening currency ties to enhance economic stability and reduce reliance on foreign exchange.
Global Shift Away From US Dollar Accelerates—Russia and Ethiopia Deepen Currency Ties
Countries worldwide are increasingly shifting away from the U.S. dollar in trade, opting instead for national currencies to reduce reliance on foreign exchange and enhance economic stability. Russia and Ethiopia are among the latest to embrace this trend, as they begin trading in their respective currencies. Ethiopian Ambassador to Moscow Genet Teshome Jirru highlighted that while the transition is still in its infancy, both nations are committed to expanding the practice. He stated in an interview with Tass:
This process between Russia and Ethiopia is still in its early stages, so it is too early to provide precise statistics. But both sides are clearly interested in trading in national currencies and this cooperation will develop over time.
The ambassador stressed that conducting trade in local currencies offers financial advantages, regardless of external factors such as international sanctions. “Even if there were no sanctions, trade in local currency is always very profitable,” he said, explaining that it eliminates transaction costs and shields businesses from the volatility of exchange rate fluctuations.
The decision by both countries to trade without a dominant global currency reflects a broader trend toward economic independence and risk reduction. Russia’s expansion of trade partnerships using national currencies strengthens its economic ties with Ethiopia, reducing reliance on third-party currencies.
Further emphasizing the benefits, the ambassador pointed out that reliance on foreign currencies introduces uncertainty and can drive up the cost of goods due to speculative trading. He concluded that reducing dependence on external currencies brings more stability to economic exchanges, noting:
Trade in national currencies makes economic relations more predictable.
Ethiopia’s economic ties with Russia are growing following its BRICS membership in January 2024. As part of the bloc, which also includes Brazil, Russia, India, China, South Africa, Egypt, Iran, the United Arab Emirates (UAE), and Indonesia, Ethiopia seeks to enhance trade and investment to support economic diversification. The BRICS expansion reflects a broader push by developing nations to form alternative economic alliances and reduce reliance on Western financial systems. Ethiopia’s participation may also promote trade in national currencies among member states. #Write2Earn