China’s yuan has replaced the United States Dollar as the most traded currency in Russia.
This comes a year after the west imposed sanctions in Russia over ots invasion of Ukraine Western sanctions were imposed on Russia over its invasion of Ukraine in February last year.
A year along the line, the yuan surpassed the dollar in monthly trading volume for the first time, and this trend continued in March, according to data from the Moscow Exchange.
The yuan’s trading volume in the Russian market was insignificant before the invasion.
The change is attributed to additional sanctions placed on some of Russia’s banks this year, limiting their ability to make cross-border transfers in dollars and other currencies from countries considered “unfriendly” by the Kremlin
Russia has deepened ties with China since the invasion, prompting a break with the West with Chinese President Xi Jinping making his first trip to Moscow since his re-election and promised the Kremlin cooperation in the areas of trade, investment, supply chains, mega-projects, energy and hi-tech.
Sanctions targeting Russia’s financial system have forced the Kremlin and Russian companies to switch their foreign trade transactions, hitherto dominated by the dollar and euro, to currencies of countries that refused to join any of the sanctions.
Russia's Finance ministry earlier this year switched its market operations to yuan instead of dollars and developed a new structure for the National Wealth Fund to hold 60% of its assets in yuan.
The Bank of Russia regularly asks companies and citizens to transfer their assets to rubles or “friendly” currencies to avoid the risk of them being blocked or frozen.
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