The Chinese yuan has become the main currency in Russia’s external economic activities. This was announced by the governor of the Central Bank, Elvira Nabiullina on Thursday, February 1.
“By 2022, there was a significant share of dollars and euros in our foreign exchange reserves. This was due to the fact that foreign trade contracts were largely concluded in these currencies. Now, foreign economic activity is very actively switching to the use of other currencies, mainly the yuan. The share of Russia’s settlements in national currencies with other BRICS countries has increased to 85%, from just 26% two years ago,” said Elvira Nabiullina, referring to international sanctions imposed on Moscow after Russia’s invasion of Ukraine.
Moreover, the pressing US sanctions on developing countries is what led them to create an alternative and start reducing their dollar exposure.
The role of sanctions
In addition, Russia and Iran have officially terminated their relations with the SWIFT payment system and no longer use it for transactions.
BRICS member Russia has confirmed that it is building a new payment system and that the dollar will not be integrated into the states’ bilateral trade relations. The move also gives Russia autonomy in global trade and the ability to be unaffected by US sanctions. According to data released by the governor of the Central Bank of Russia, the yuan’s share in Russian exports rose from 0.4 percent two years ago to 34.5 percent today. During the same period, the share of Chinese currency in imports increased from 4.3 to 36.4%.
As the rotating chairman of the BRICS grouping in 2024, Russia will “present itself with a multilateral agenda” and lead cooperation in the use of the yuan and other currencies, Nabiullina concluded.
