If trading in the Chinese yuan stops, the foreign exchange market in Russia will actually die.
The foreign exchange market of the Moscow Exchange, under the conditions of sanctions, was forced to trade in the only available currency – the Chinese yuan. According to the estimates of the Central Bank of the Russian Federation, the Chinese currency accounts for 99.6% of the foreign exchange market in Russia, writes The Moscow Times.
By comparison, at the beginning of Russia’s full-scale invasion of Ukraine, the yuan accounted for only 3.5% of foreign exchange transactions on the Moscow Exchange, and by the beginning of 2024 this share has grown to half.
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Today, in addition to the Chinese currency, only a few currencies of other countries remain on the main Russian currency exchange platform, but the trading volumes in them are insignificant. Among them are the Belarusian ruble and the Kazakh tenge, the rates of which are published by the Moscow Exchange on the main page of the website instead of the dollar and euro.
Trading also continues in the Turkish lira, which two years ago Russian authorities considered a substitute for dollars and euros, but the volume of these trades is falling rapidly due to the risk of a second penalty for Turkish bank.
Overall, the sanctions reduced currency trading volumes on the Moscow Exchange by a third. The volume of transactions here fell from 418 billion rubles to 282 billion rubles per day in the second half of June.
According to experts, if trading in the yuan stops, the foreign exchange market in Russia will really die. According to Bloomberg, the Central Bank of the Russian Federation is already considering this scenario as real.
The head of the regulator, Elvira Nabiullina, admitted that the Central Bank of Russia was “considering the risks” of stopping yuan trading. According to him, the situation with cross-border payments has become more complicated, because foreign banks of “friendly” countries are massively blocking negotiations with the Russian Federation.
Let’s recall that on June 12, the Moscow Exchange, the National Clearing Center and the National Settlement Depository were included in the US sanctions letter. Following the United States, Great Britain introduced sanctions against the Moscow Exchange.
On June 13, Moscow Exchange shares opened with a fall of up to 15% amid the imposition of US sanctions. The exchange announced the cessation of trading in dollars and euros.
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.