With the conflict in Ukraine and Western sanctions on Moscow shutting Russia's banks and many of its companies out of the dollar and euro payment systems, China’s yuan has swept into the country's markets, presenting an economic counterweight to the dollar
Moscow becomes No.4 offshore trading centre for yuanRussian central bank supports trend but warns of risks
His contract manufacturing business with Russia has been small in the past, but now he's preparing to invest in warehousing there. Russia's financial shift eastwards could boost cross-border commerce, present a growing economic counterweight to the dollar and limit Western efforts to pressure Moscow by economic means.
Indeed, yuan-rouble trading totalled 185 billion yuan in October, more than 80 times the level seen in February when Russia launched what it refers to as a "special military operation" in Ukraine near the end of the month, according to exchange data. To put this in a global context, though, the dollar and euro are still by far the dominant currencies, representing more than 42% and 35% of flows respectively as of September this year. The yuan has risen to almost 2.5% from below 2% two years earlier.
The yuan comprised about 19% of Russia's trade settlements with China in 2021 versus the dollar's 49% share, Andrey Melnikov, deputy director at international cooperation department at the Russian central bank, said in September.
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