Chinese Yuan replaces U.S. dollar as most traded currency in Russia
The United States dollar has been replaced in Russia as the nation's most traded currency by the Chinese Yuan. This comes as the war in Ukraine rages on, and sanctions on the invading nation remain firm.
Reuters reported, “The Moscow Exchange trading volume in Chinese yuan surpassed that of the U.S. dollar in 2023, the Kommersant daily reported on Tuesday, as Moscow pursues a de-dollarization strategy in the face of Western sanctions on its financial system.”
The Yuan made up 42% of all foreign currency being traded in Moscow in 2023. The United States dollar comes in behind with a slim margin, accounting for 34.15% of all trading.
Russia has also increased energy supplies to China, and increased purchases of cars, smartphones, and more as they are crushed by U.S. sanctions. This has caused the Russian state to become somewhat dependent on China.
This means, that in a way, U.S. sanctions paired with voluntary Russian separation from America has indeed harmed Russia, but more importantly strengthened China.
Moscow now views dollars and euros as “unfriendly” currencies and has thus reduced trade voluntarily. The rate at which Chinese Yuan is used to purchase Russian made commodities has also sharply risen.
The chairman of Russia's VTB Bank, Andrei Kostin, claimed that China has now become the second largest economy in the world, and is trending towards becoming the first.
He also said, “Chinese yuan will replace the US dollar as the world's main reserve and settlement currency as early as the next decade. In fact, the Central Bank of Russia is already investing its reserves in yuan.”
Whether these remarks contain any truth, or are simply propaganda is up for debate.
