Over the past year, the yuan’s share of global trade deals has risen from 2 percent to 4.5 percent, according to the Financial Times. At the same time, the yuan’s share in calculating Russia’s exports rose from 0.5% to 16% over the same period. These are already the data of the Financial Markets Risk Review published by the Bank of Russia.
According to the CEO of the SINORUSS consulting firm, an expert of the Russian-Chinese Committee for Friendship, Peace and Development, Surana Radnaeva, trade relations between China and Russia will continue to strengthen in 2023, which means that ‘there are all the prerequisites for the use of the yuan in the Russian economy will become more frequent and potentially equal to the dollar in importance for international trade.
“An indicator of Russia’s confidence in the Chinese currency is the fact that since the end of 2022 the Ministry of Finance has approved a new structure of NWF funds: the possibility of investing in dollar-denominated assets has been excluded and the maximum number of shares of the yuan and gold have now been increased to 60% and 40%, respectively – notes Radnaeva – Along with the increase in the need for mutual exchanges, the question of mutual settlements arises also. In the face of sanctions pressure, the Chinese yuan payment system CIPS appears to be an excellent solution for settlements with Chinese partners. CIPS is a single currency and international interbank payment system, at present more than 20 Russian banks have already connected to it, including MCB, VTB, Asia-Pacific Bank, Transcapitalbank, Solidarity Bank and others.Experts suggest that there will be more.The main advantage of the system is its complete isolation from SWIFT, which allows the Chinese side to fully control the system and use it on the territory of the Russian Federation without fear of further sanctions.
The expert notes that the yuan is currently the most traded currency in Russia. The increase in the share of the Chinese currency in international trade with Russia is accelerating the process of internationalization of the yuan, which will allow China to trade with other countries in the same format in the future, bypassing the dollar.
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