Russia boosts cross-border settlements in yuan

The currency has even reportedly been used as a means of payment with the UK, US, and EU

Russia is increasing the share of the Chinese yuan in foreign trade and not exclusively with China, RBK reported on Thursday, citing a data from the Economic Development Ministry.

According to the ministry’s calculations, in the first half of 2023, 75% of Russian-Chinese trade turnover was settled in yuan. The yuan’s share in Russia’s settlements with partners besides China also surged in the reporting period and amounted to 25%.

Moreover, the average daily volume of trading in the ruble-yuan pair on the Moscow Exchange approached 200 billion rubles ($2 billion) in the first half of the year, a 100-fold increase since the beginning of 2022, the ministry said.

Data from other sources also point to the growing popularity of the Chinese currency in Russia’s foreign trade. The European Bank for Reconstruction and Development (EBRD) published a study this week based on 12 million import transaction records from Russia.

According to the figures, the yuan overtook the dollar in Russia’s import settlements with China back in 2022 and has since been used in Russian trade with Mongolia, Taiwan, the Philippines, Malaysia, the United Arab Emirates, Thailand, Japan, Tajikistan, and Singapore. Moreover, the Chinese currency has even appeared as a means of payment in Russia’s occasional import settlements with the US, EU, and UK (about 1-2% of transactions).

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The yuan’s popularity reflects Russia’s efforts to move away from the currencies of ‘unfriendly countries,’ meaning those that have placed sanctions on Russia. Moscow has repeatedly declared that the dollar and euro have been compromised due to the restrictions placed on Russia and that it no longer trusts these currencies.

The Russian ruble is currently the main currency in Russia’s export settlements – its share this year has increased more than threefold and now exceeds 40%. According to data from the Bank of Russia, as of July of this year, the combined share of the ruble and currencies of friendly countries in Russia’s foreign trade had reached 72% in exports (up from 15% in early 2022) and 69% in imports (up from 33% in early 2022).

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