What’s new: The yuan’s share on Russia’s forex market jumped to a record high in July, as Moscow seeks to reduce dollar reliance amid Western sanctions.
The Chinese currency was on one side of 44% of forex transactions on the Russian exchange-traded market last month, up from 39.8% in June, according to a recent report released by the Bank of Russia.
Russia’s exchange-traded forex market is continuing to pivot toward currencies of “friendly” countries, the central bank said.
Meanwhile, the share of currencies branded “toxic” by the Kremlin, namely the U.S. dollar and euro, slid to 54.4% from 58.8% during the same period, according to the report.
The background: The yuan has been gaining more traction in Russia following a wave of U.S.-led sanctions on the country over its invasion of Ukraine in February 2022.
Russian companies have increasingly turned to the redback to settle trade and investment while cutting their dollar dependence. Since last year, a number of Russian giants, including gold producer Polyus PJSC and aluminum producer United Co. Rusal International PJSC, have offered large-scale yuan-denominated bonds to lure investors.
The Bank of Russia resumed yuan trading in January, almost a year after purchases were suspended. According to Moscow Exchange data gathered by Bloomberg, the yuan surpassed the dollar in monthly trading volume for the first time just one month later.
Read more In Depth: China Makes Further Inroads in Popularizing the Yuan
Contact reporter Zhang Ziyu (ziyuzhang@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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