For a long time, America’s greenback was the benchmark for determining the exchange rate of Russia’s ruble, but the Chinese yuan has gradually been taking the dollar’s place over the past months. Yuan trading volumes have been growing on the Moscow Exchange, approaching those of the dollar, Izvestia writes.

Iran PressEurope: The yuan is gaining more clout in global trade and its share in Russian-Chinese trade is rapidly increasing. There also are other reasons for rising interest in the Chinese currency.

"The currencies that were traditionally used for transactions and savings, including the dollar, the euro and the British pound, are becoming toxic in banks for Russian companies and individuals. There are restrictions in terms of their use and transfers, which mean high fees and there is the risk of being blocked. In this regard, the yuan carries fewer risks of this sort," Chief Analyst at TeleTrade Mark Goikhman emphasized.

"The savings that the Finance Ministry will probably start making after closing the deficit are planned to be made in yuan. Clearly, it will have a positive impact on the ruble’s rate because freezing yuan savings or banning yuan conversion will be quite difficult," financial analyst Artyom Zvezdin added.

On the one hand, the rise in yuan trading and the share of yuan in payments helps stabilize the Russian currency’s exchange rate and create better conditions for investment in the Russian economy. However, as the national currency of a developing country, the yuan is quite volatile and also subject to sectoral risks.

According to experts, as more countries start to use the yuan, and trade between Russia and China grows, ruble/yuan trading will exceed that of the dollar. However, it’s too early to talk about the yuan replacing the greenback in terms of exchange rate formation and Russia’s external economic relations. The yuan’s share in international payments needs to rise multiple times and a vast majority of countries need to recognize and start using the yuan in order for the Chinese currency to at least be able to equal the dollar.


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