The Chinese yuan has become a major player in Russia’s foreign trade, according to data released by the Bank of Russia in its Financial Market Risk Report on Thursday.
The Chinese currency’s share in Russia’s import settlements had jumped to 23% by the end of last year from only 4% in January 2022. The yuan’s share in export settlements also surged from 0.5% to 16%.
Meanwhile, the share of the US dollar and euro in Russia’s foreign trade has dropped substantially. At the start of 2022, 87% of export settlements were carried out in these currencies, while as of January 2023 their share had slumped to 48%. The share of the dollar and euro in import settlements also dropped, falling from 65% in January 2022 to 46% in December.
“Against the background of large-scale sanctions from unfriendly countries since March 2022 there has been a broad structural transformation of the Russian economy, including in terms of settlements of foreign economic activity. The decrease in the share of toxic currencies was mainly due to the growth of the share of the yuan,” the regulator said in the report.
The share of currencies of other ‘friendly’ countries at the beginning of 2023 was 4%. Overall, the ruble and ‘friendly’ currencies together accounted for 52% of Russia’s export settlements at the end of 2022, surpassing the share of the dollar and the euro for the first time on record.
The term ‘friendly’ refers to countries that have not placed sanctions on Russia in connection with the Ukraine conflict.
“This figure is a reflection of the current situation, those risks and costs that we now see in the currencies of unfriendly countries,” Egor Susin, managing director of Gazprom Private Banking, told RBK, noting that there is significant potential for growth in settlements that don’t involve the dollar or the euro.
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