Chinese buyers of Russian oil are seeking to avoid reputation damage, one analyst said.
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The yuan’s share of the Russian currency market is now 40%-45% vs. less than 1% at the start of the year, according to the Moscow Exchange.
And yuan-ruble trading in October was more than 80 times the level in February, Reuters reported.
Russia’s central bank is pushing for a balanced transition to the yuan that includes imports, exports and capital transactions.
The yuan now accounts for nearly half of Moscow’s currency market, and the Russian central bank has called for a balanced transition to China’s currency.
The yuan’s share of the currency market is now 40%-45%, up from less than 1% at the start of the year, the Moscow Exchange told Reuters.
And yuan-ruble trading reached a 185 billion yuan in October, which is an 80-fold increase from February, according to Reuters.
Since Vladimir Putin launched his war on Ukraine in February, causing Western governments to freeze the Kremlin’s currency reserves, Russia has been moving away from so-called “toxic” currencies like the dollar and euro.
And Russia hopes that a stronger relationship with China and its currency can be both a short-term fix and a long-term prospect. Russian companies like Rosneft and Polyus have raised considerable amounts of yuan in the Chinese bond market this year.
On Thursday, Russia’s central bank further detailed the shift away from Western currencies, saying that about half of cross-border payments are in currencies other than the dollar and euro vs. 21% at the start of the year.
But the bank also cautioned that Russian banks have limited opportunities in interest-bearing yuan investments.
“It is also important that the transition to the yuan is balanced, addressing both exports and imports, as well as payments for capital transactions,” the central bank said in a financial stability report.