Russia is significantly increasing its use of the Chinese yuan in foreign trade, and not just with China. According to data from the Economic Development Ministry, in the first half of 2023, 75% of Russian-Chinese trade turnover was settled in yuan. Additionally, the yuan’s share in Russia’s settlements with partners other than China rose to 25%.
The Moscow Exchange also reported a substantial increase in trading volume in the ruble-yuan pair. The average daily volume of trading approached 200 billion rubles ($2 billion) in the first half of the year, marking a 100-fold increase since the beginning of 2022.
Various sources confirm the growing popularity of the Chinese currency in Russia’s foreign trade. The European Bank for Reconstruction and Development (EBRD) published a study based on 12 million import transaction records from Russia, revealing that the yuan overtook the dollar in Russia’s import settlements with China in 2022. Since then, the yuan has also been used in Russian trade with countries such as Mongolia, Taiwan, the Philippines, Malaysia, the United Arab Emirates, Thailand, Japan, Tajikistan, and Singapore. Surprisingly, the Chinese currency has even been used as a means of payment in Russia’s occasional import settlements with the US, EU, and UK, accounting for about 1-2% of transactions.
The growing popularity of the yuan reflects Russia’s efforts to reduce its reliance on the currencies of countries that have placed sanctions on it, which it considers unfriendly. Moscow has repeatedly expressed mistrust in the dollar and euro due to the restrictions imposed on Russia. The Russian ruble remains the main currency in Russia’s export settlements, with its share increasing to over 40% this year – more than three times higher than before. According to the Bank of Russia, as of July, the combined share of the ruble and currencies of friendly countries in Russia’s foreign trade accounted for 72% in exports (up from 15% in early 2022) and 69% in imports (up from 33% in early 2022).
Russia’s de-dollarization efforts are clearly reshaping its foreign trade landscape, with the yuan taking on a more dominant role alongside the ruble. The shift away from traditional Western currencies reflects Russia’s desire to protect its economy from external influences and ensure stability in its trade transactions. As the yuan continues to gain traction in Russia’s foreign trade, it will be interesting to see how this development influences global currency dynamics.
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