According to the Bloomberg Data, China’s Yuan has replaced Dollar as the most traded currency in Russia.
Feburary was the first month where it flipped, and its showing no sign of stopping in March as well.
The interesting thing is, until Russia had invaded Ukraine, there were hardly any volumes in Yuan Trading in Russia. Some of the reasons behind this shift is the strategic move by China to increase its economic power and reduce its dependence on the US dollar. Russia and China’s relations are strengthening as well leading to trading in yuan more convenient and cost-effective. Some reports also suggest that the Finance Ministry of Russia has called onto the Russian companies to move their reserves either in Rubel or ‘Friendly Currencies’ to avoid the risk of getting forzen.
The yuan accounted for about 2.7% of global foreign-exchange reserves at the end of 2022, IMF data showed. The dollar accounted for roughly 58%.
What are your thoughts on this trend? Do you think it will continue in the long term?