The economic ties between Moscow and Beijing have deepened as the Russian Central Bank announced that the value of the yuan against the ruble will be the new benchmark for all currency pairs.
Following the latest U.S. sanctions slapped on Russia over its actions in Ukraine, trading in dollars and euros was halted at the Moscow Exchange. This move underscores the diminishing importance of the dollar and euro in the Russian market, with a shift towards trading in yuan and other friendly currencies over the past two years.
Russia’s pivot to the East for trade and settlements, coupled with China’s neutral stance on Russia’s military actions, has seen trade between the two countries hitting a record $240 billion in 2023. The Moscow Exchange revealed that the majority of trading is now dominated by the yuan at 54%.
The Moscow Exchange has suspended the trading of dollars and euros due to the U.S. sanctions impacting Russian banks involved in dollar trades. This has forced a shift towards bilateral deals for currency trades, sidelining central exchanges.
Despite the upcoming implementation of tougher sanctions on August 13th, individuals and companies will still be able to conduct euro and dollar transactions through banks, reassuring the safety of foreign currency deposits.