Russia to Use Yuan in Place of Dollar

Russia to Use Yuan in Place of Dollar

Nov 30 • Top News • 1289 Views • Comments Off on Russia to Use Yuan in Place of Dollar

Due to Western sanctions imposed against Moscow after the outbreak of the Ukraine conflict, Wang’s plans changed. Russian banks and many companies could not access dollar and euro payment systems.

Currently, she is preparing to invest in bearings in Russia, where her contract manufacturing business was small earlier.

“Our goal is to receive 10-15% of our total sales from Russia next year,” a businessman from Guangdong province in southern China, whose annual income is about $20, largely from Africa and South America, said.

Amid the Russian lockdown, Wang hopes to take advantage of the rapidly growing yuanization of the economy. Consequently, Chinese exporters can reduce foreign exchange risks, and Russian buyers can make payments more conveniently.

In addition to stimulating cross-border trade, a shift in Russian finances to the east would help balance the dollar and limit Moscow’s economic pressure from the West.

As stock data analyzed by Reuters shows, the total volume of yuan/ruble trading on the Moscow Stock Exchange topped 9 billion yuan ($1.25 billion) a day last month. In the past, it seldom exceeded 1 billion yuan per week.

Yuan’s presence in Russia was not commented on by the US Treasury.

Russian giants need yuan

Money flows internationally follow a similar pattern. According to the SWIFT global financial system, Russia was not even among the top 15 countries using the Chinese yuan outside of mainland China in April. After that, it moved to number 4 behind Hong Kong, its former metropolitan area, the United Kingdom, and Singapore.

Cash flows in September were dominated by the dollar and the euro, representing over 42% and 35% of global cash flows. A two-year-old yuan share of less than 2% has grown to almost 2.5%.

“As a result of the conflict between Russia and Ukraine, there have been more opportunities for Chinese businesses to do business in Russia,” said Shen, adding that his association has received inquiries from Chinese companies seeking to do business athere.

Yuan is not only used by Chinese companies or small businesses.

A major lender Sberbank (SBER.MM), and an oil company are likely to join the list of Russian giants that have borrowed 42 billion yuan in the Russian market. It is also possible for Gazprom Neft to issue bonds in yuan.

A significant portion of Rusal’s finished products come from China, where it buys raw materials and sells finished products, but declined to give details about its yuan purchases and sales.

Xi and Putin: “There are no borders.”

Russia’s dependence on the dollar has long been a goal of Vladimir Putin, but geopolitics has accelerated this trend in 2022.

China, the world’s second-largest economy, is the largest power in the world that has not joined the anti-Russian economic sanctions. In February, a few weeks before the launch of the NWO in Ukraine, Putin and Xi Jinping signed an agreement on cooperation without borders. As reported in September and near. Andrey Melnikov, director of international cooperation at the Bank of Russia, said the yuan accounted for about 19% of Russia’s trade deals with China in 2021, compared to the dollar’s share of 49%.

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